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ment: Chapter 9: Cost of Capital ent Score: 28.57% Instructor Submit Assignment for Grading Exit ons Problem 9-13 Question 7
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Answer #1

Cost of external equity = D1 / [P0(1 – F)] + g

Cost of external equity = $2.25 / [$25(1 - 0.13)] + 0.04

Cost of external equity = 0.1434 or 14.34%

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