Blue Co. just paid a P2 per share dividend on its common stock.  The dividend is expected to grow at a constant rate of 7% Annually.  If the company issues additional stock, it must pay its investment banker a flotation cost of P1 per share.  If the current stock sells for P42 each, what is the cost of issuing new external equity?   a. 11.51% b. 11.88% c. 12.11% d. 12.22%

Q: NoGrowth Industries presently pays an annual dividend of $1.00 per share and it is expected that…

A: Annual dividend = $ 1.00 Cost of equity = 10%

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A:

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A: Formulas:

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A: Formula:

Q: stock

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