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Sutter Corporation's Common Stock Is Selling for $16

Question 70

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Sutter Corporation's common stock is selling for $16.80 a share.Last year Sutter paid a dividend of $.80.Investors are expecting Sutter's dividends to grow at an annual rate of 5% per year.What is the cost of internal equity?

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D1 = $.80 × 1.05 = $...

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