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Question
Martin Corporation's common stock is currently selling for $50 per share. The current dividend is $2.00 per share. If dividends are expected to grow at 6 percent per year and if flotation costs are 10 percent, then what is the firm's cost of retained earnings and what is its cost of new common stock?
a. 10.71%; 10.24%
b. 10.24%; 10.71%
c. 10.24%; 11.38%
d. 11.38%; 10.71%
e. 9.31%; 9.86%
Answer
This answer is hidden. It contains 56 characters.
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