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Calculate the flotation cost for Lloyd Enterprises

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Lloyd Enterprises has a cost of new equity of 12.5%. They paid a dividend last year of $3 and expect dividends to grow at a constant rate of 5%. Their stock is selling for $50 per share. Calculate the flotation cost associated with issuing new equity.

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This solution is comprised of a detailed explanation to calculate the flotation cost for Lloyd Enterprises.

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Lloyd Enterprises has a cost of new equity of 12.5%. They paid a dividend last year of $3 and expect dividends to grow at a constant rate of 5%. ...

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