ABC Corp. issued new shares with a par value of P1,000, issue price of P1,200 and net proceeds of 1,050. Shareholders expect dividends of P80 per share for the first year and a growth rate of 4%. What would be the cost of retained earnings if it was used as a financing source instead of ordinary shares? * a. 11.924% b. 10.667% c. 11.619% d. 12.000%

ABC Corp. issued new shares with a par value of P1,000, issue price of P1,200 and net proceeds of 1,050. Shareholders expect dividends of P80 per share for the first year and a growth rate of 4%. What would be the cost of retained earnings if it was used as a financing source instead of ordinary shares? * a. 11.924% b. 10.667% c. 11.619% d. 12.000%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 8P

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