The company is issuing additional common stock. The recently paid dividend is $1.00. Current market price of the stock is $40. Floatation cost is 10% from the market price. The dividend is expected to grow at 5%. Compute the cost of common stock.
The company is issuing additional common stock. The recently paid dividend is $1.00. Current market price of the stock is $40. Floatation cost is 10% from the market price. The dividend is expected to grow at 5%. Compute the cost of common stock.
Chapter9: The Cost Of Capital
Section: Chapter Questions
Problem 5P
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The company is issuing additional common stock. The recently paid dividend is $1.00. Current market price of the stock is $40. Floatation cost is 10% from the market price. The dividend is expected to grow at 5%. Compute the cost of common stock.
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