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Wonka Candy Company hired you to help them estimate their cost of capital. You were provided with the following data: next expected dividend per share = $2.25; current stock price = $75; growth rate = 5% (constant); and flotation costs on new stock issues = 15%. What is the cost of equity related to retained earnings and that raised by selling new common stock?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92408400

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