Expected cash dividends are $3.00, the dividend yield is 4%, flotation costs are 4% of price, and the growth rate is 3%. Compute cost of new common stock? I get 300 but the choices are in %'s 7.00 7.2 6.9 4.2%

Expected cash dividends are $3.00, the dividend yield is 4%, flotation costs are 4% of price, and the growth rate is 3%. Compute cost of new common stock? I get 300 but the choices are in %'s 7.00 7.2 6.9 4.2%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 2P

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Question

Expected cash dividends are $3.00, the dividend yield is 4%, flotation costs are 4% of price, and the growth rate is 3%. Compute cost of new common stock? Toet 300 but the choices are in %'s 7.00 7.2 6.9 4.2%

Expected cash dividends are $3.00, the dividend yield is 4%, flotation costs are 4% of price, and the growth rate is
3%. Compute cost of new common stock?
I get 300
but the choices are in %'s
7.00
7.2
6.9
4.2%

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Expected cash dividends are $3.00, the dividend yield is 4%, flotation costs are 4% of price, and the growth rate is 3%. Compute cost of new common stock? 1get 300 but the choices are in %' 7.00 7.2 6.9 4.2%