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Business, 30.10.2019 20:31 IkweWolf1824

J. ross and sons inc. has a target capital structure that calls for 40 percent debt, 10 percent preferred stock, and 50 percent common equity. ross' common stock currently sells for $40 per share. the firm recently paid a dividend equal to $2 per share on its common stock, and investors expect the dividend to grow indefinitely at a constant rate of 10 percent per year. if it issues new common stock, the firm will incur flotation costs equal to 7 percent. what is the firm's cost of retained earnings?

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