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Cost of External Equity

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Q: Lattimore, Inc. is issuing new common stock at a market price of $22. Dividends last year were $1.15 per share and are expected to grow at a rate of 7%. Flotation costs will be 5% of the market price. What is Lattimore's, Inc.'s cost of external equity?

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Solution Summary

The cost of external equity is determined.

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