The Choi Companys next expected dividend, D1, is $3.18; its growth rate is 6 percent; and its

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The Choi Company’s next expected dividend, D1, is $3.18; its growth rate is 6 percent; and its stock currently sells for $36. New stock can be sold to net the firm $32.40 per share.

a. What is Choi’s percentage flotation cost, F?

b. What is Choi’s cost of new common stock, re?

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Principles of Finance

ISBN: 978-1285429649

6th edition

Authors: Scott Besley, Eugene F. Brigham

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Question Posted: Nov 24, 2014 09:22 AM

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The Choi Companys next expected dividend, D1, is $3.18; its growth rate is 6 percent; and its

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Principles of Finance

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