CFIN (with MindTap Finance, 1 term (6 months) Printed Access Card) (MindTap Course List)
6th Edition
ISBN: 9781337407342
Author: Scott Besley, Eugene Brigham
Publisher: Cengage Learning
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Chapter 11, Problem 9PROB
Summary Introduction
Cost of retained earnings:
Cost incurred by the company by using retained earnings, instead of declaring dividend to common stock holders.
Calculate the cost of retained earnings as follows:
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:
CE has current price is $50 and expected dividend of $6. Flotation cost for issuing the new common stock is 7%.
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Dividend disocunt model (DDM); Author: Edspira;https://www.youtube.com/watch?v=TlH3_iOHX3s;License: Standard YouTube License, CC-BY