the expected dividend growth rate is zero, then the cost of external equity capital raised by issuing new common stock If the expected growth rate is not zero, then the cost of external equity must be found using a different formula.

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If the expected dividend growth rate is zero, the cost of external equity capital raised by issuing new common stock can be found using the constant dividend growth model, but if the expected growth rate is not zero, a different formula, such as the dividend discount model, must be used.

The Expected Dividend Growth Rate Is Zero, Then the Cost