Question: Question 25 (3.5 points) Costly Corporation is considering using equity financing. Currently, the firm's stock is selling for $55.00 per share. The firm's dividend for

Question 25 (3.5 points) Costly Corporation is considering using equity financing. Currently, the firm's stock is selling for $55.00 per share. The firm's dividend for next year is expected to be $3.40 with an annual growth rate of 5.0% thereafter indefinitely. If the firm issues new stock, the flotation costs would equal 14.0% of the stock's market value. The firm's marginal tax rate is 40%. What is the firm's cost of external equity? 11.49% 11.18% O 12.19% O 12.55% 11.49%

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