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Determine the cost of equity raised through selling new stock using the dividend growth model approach

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Current per share market price $48.00
Most recent per share dividend $3.50
Expected long-term growth rate 5.0%

Timer can issue new common stock to net the company $44 per share. Determine the cost of equity raised through selling new stock using the dividend growth model approach. (Compute answer to the nearest .1%).
a. 12.3%
b. 13.4%
c. 13.0%
d. 12.7%

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This solution determines the cost of equity raised through selling new stock using the dividend growth model approach.

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Timer can issue new common stock to net the company $44 per share. Determine the cost of equity ...

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