Sullivan & Associates expects to pay a common stock dividend of $2.00 per share next year (d
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Question:
Sullivan & Associates expects to pay a common stock dividend of $2.00 per share next year (d1). Dividends are expected to grow at a 5% rate for the foreseeable future. Sullivan's common stock is selling for $20 per share, and issuance costs are $3.00 per share.
a.What is Sullivan's cost of internal equity?
b.What is Sullivan's cost of external equity?
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