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    Cost of Retained Earnings

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    A firm's stock is selling for $78. The next annual dividend is expected to be $2.70. The growth rate is 9%. The flotation cost is $5.00. What is the cost of retained earnings?
    A) 13.09%
    B) 12.46%
    C) 12.75%
    D) none of the above.

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    Solution Summary

    Calculates cost of retained earnings.