Question: 13. Chapter MC, Section 09, Problem 068 As the winner of a contest, you are now CFO for the day for Maguire Inc. and your

13. Chapter MC, Section 09, Problem 068 As the winner of a contest, you are now CFO for the day for Maguire Inc. and your day's job involves raising capital for expansion. Maguire's common stock currently sells for $45.00 per share, the company expects to earn $2.75 per share during the current year, its expected payout ratio is 70%, and its expected constant growth rate is 6.00%. New stock can be sold to the public at the current price, but a flotation cost of 8% would be incurred. By how much would the cost of new stock exceed the cost of common from reinvested earnings? Oa. 0.09% Ob. 0.19% Oc. 0.84% Od. 0.37% Oe. 0.56%

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