The Company Paid A Dividend Of $1.26 On Its Common Stock. If The Market Price Of The Common Stock Is $40 And Dividends Are Expected To Grow At A Rate Of 6% Per Year For The Foreseeable Future, What Is The Company Cost Of Retained Earnings? O 6.65% 9.33% D 8.25% 7.26% The Firm Can Raise Debt By Selling $1,000 Par Value, 8% Coupon Interest Rate, 20-Year

year bonds on which annual interest payments will be made. To sell the issue, an average discount of $30 per bond would have to be given. The firm also must pay flotation costs of $30 per bond. The firm is in the 40% tax bracket. Calculate the after-tax cost of debt. 6.61% 5.139 4.42 3.655.

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To calculate the company cost of retained earnings we need to use the dividend capitalization model ... View the full answer