CFA Level 1 Exam

3959 Questions

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Question No. 1

Seasons, Inc. has just decided to issue 1 million shares of new equity. The firm has had a steady dividend

growth of 3% and is expected to continue along this path, having just paid a $3.23 per share dividend. The
flotation costs for the new equity amount to 2.2% of the total capital raised and the firm receives $31.4 million before flotation costs, calculate the cost of external equity.
Choose the correct option from the given list.
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