(Solution) - Segwick Petroleum Ltd has a dividend reinvestment plan in which -(2025 Original AI-Free Solution)

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Segwick Petroleum Ltd. has a dividend reinvestment plan in which new stock is issued to participating investors. Segwick?s payout ratio is 40%, and 30% of stockholders participate in the plan. The firm?s ROE is 10%. What percentage increase in flotation-cost-free equity capital does the plan provide?