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your corporation expect to have operating income during the coming year of1000000 and it expect its earning and dividend to grow indefinitely at a constant rate12.5%. The firm has5000000 of debt outstanding at interest rate8% and it has100000 shares of common stock outstanding. the firm has paid50% of net earning as dividends. the current price of its common stock is $40 but it would incur a10% flotation cost if it were to sell new stock. The firm's tax rate is40%.
what is the firm's cost of retained earnings?
what is the firm's cost of newly issued stock?
what is the firm's cost of debt?
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