Cost of new common stock is the cost incurred by the company for issue new common stock. Calculate the cost new common stock as follows: Cost retained earnings = Expected dividend Current price × ( 1 − Flotation cost ) + Growth rate Flotation cost is cost incurred for issuing the common stock. Examples are underwriting fee, legal fee and registration fee. HHA has growth rate of 5% and current price is $28 and paid a recent dividend of $2.40. Cost of the new common stock is 15%.

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Answer 1

Question

Chapter 11, Problem 10PROB

Summary Introduction

Cost of new common stock is the cost incurred by the company for issue new common stock.

Calculate the cost new common stock as follows:

Cost retained earnings=Expected dividendCurrent price×(1−Flotation cost)+Growth rate

Flotation cost is cost incurred for issuing the common stock. Examples are underwriting fee, legal fee and registration fee.

HHA has growth rate of 5% and current price is $28 and paid a recent dividend of $2.40. Cost of the new common stock is 15%.

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Answer 2

Question

Chapter 11, Problem 10PROB

Summary Introduction

Cost of new common stock is the cost incurred by the company for issue new common stock.

Calculate the cost new common stock as follows:

Cost retained earnings=Expected dividendCurrent price×(1−Flotation cost)+Growth rate

Flotation cost is cost incurred for issuing the common stock. Examples are underwriting fee, legal fee and registration fee.

HHA has growth rate of 5% and current price is $28 and paid a recent dividend of $2.40. Cost of the new common stock is 15%.

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Answer 3

Question

Chapter 11, Problem 10PROB

Summary Introduction

Cost of new common stock is the cost incurred by the company for issue new common stock.

Calculate the cost new common stock as follows:

Cost retained earnings=Expected dividendCurrent price×(1−Flotation cost)+Growth rate

Flotation cost is cost incurred for issuing the common stock. Examples are underwriting fee, legal fee and registration fee.

HHA has growth rate of 5% and current price is $28 and paid a recent dividend of $2.40. Cost of the new common stock is 15%.

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Answer 4

Question

Chapter 11, Problem 10PROB

Summary Introduction

Cost of new common stock is the cost incurred by the company for issue new common stock.

Calculate the cost new common stock as follows:

Cost retained earnings=Expected dividendCurrent price×(1−Flotation cost)+Growth rate

Flotation cost is cost incurred for issuing the common stock. Examples are underwriting fee, legal fee and registration fee.

HHA has growth rate of 5% and current price is $28 and paid a recent dividend of $2.40. Cost of the new common stock is 15%.

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Answer 5

Chapter 11, Problem 10PROB

Summary Introduction

Cost of new common stock is the cost incurred by the company for issue new common stock.

Calculate the cost new common stock as follows:

Cost retained earnings=Expected dividendCurrent price×(1−Flotation cost)+Growth rate

Flotation cost is cost incurred for issuing the common stock. Examples are underwriting fee, legal fee and registration fee.

HHA has growth rate of 5% and current price is $28 and paid a recent dividend of $2.40. Cost of the new common stock is 15%.

Answer 6

Chapter 11, Problem 10PROB

Summary Introduction

Cost of new common stock is the cost incurred by the company for issue new common stock.

Calculate the cost new common stock as follows:

Cost retained earnings=Expected dividendCurrent price×(1−Flotation cost)+Growth rate

Flotation cost is cost incurred for issuing the common stock. Examples are underwriting fee, legal fee and registration fee.

HHA has growth rate of 5% and current price is $28 and paid a recent dividend of $2.40. Cost of the new common stock is 15%.

Answer 7

Chapter 11, Problem 10PROB

Summary Introduction

Cost of new common stock is the cost incurred by the company for issue new common stock.

Calculate the cost new common stock as follows:

Cost retained earnings=Expected dividendCurrent price×(1−Flotation cost)+Growth rate

Flotation cost is cost incurred for issuing the common stock. Examples are underwriting fee, legal fee and registration fee.

HHA has growth rate of 5% and current price is $28 and paid a recent dividend of $2.40. Cost of the new common stock is 15%.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 11 - Prob. 1PROB Ch. 11 - Prob. 2PROB Ch. 11 - Prob. 3PROB Ch. 11 - Prob. 4PROB Ch. 11 - Prob. 5PROB Ch. 11 - Prob. 6PROB Ch. 11 - Prob. 7PROB Ch. 11 - Prob. 8PROB Ch. 11 - Prob. 9PROB Ch. 11 - Prob. 10PROB

Solution Summary: The author calculates the cost of new common stock as follows: cCost retained earnings=

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