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COST OF COMMON EQUITY AND WACC AAA Company has a target capital structure of 60% common equity and 40% debt to fund its $10 billion in operating assets. Furthermore, AAA has a WACC of 15%, a before-tax cost of debt of 10%, and a tax rate of 35%. There is no floatation cost. Its expected dividend next year (D1) is $3, and the current stock price is $40. What is the company’s expected growth rate on its dividends?

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Financial Management, Finance

Category:- Financial Management
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