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Sagot :
Based on the stock price of Ballack Co., the dividend, and the growth rate, the cost of new equity is 17.26%.
What is Ballack Co's cost of new equity?
This can be found as:
= (Next dividend / (Current price x (1 - floatation cost) ) + Growth rate
Solving gives:
= ( (46.75 x 5%) / (46.75 x ( 1 - 5%)) + 12%
= ( 2.33 / 44.41) + 12%
= 17.26%
Find out more on cost of new equity at https://brainly.com/question/22984873.
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