Question

Following is information about the common equity of Funtastic Furniture Company:
Current selling price ............. $68.00
Constant growth rate ............ 8.0%
Most recently paid dividend, D0 ........ $3.50
Flotation costs ............... 10.0%
Marginal tax rate .............. 40.0%
a. What is Funstastic’s cost of retained earnings?
b. What is Funtastics’s cost of new common stock?



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  • CreatedNovember 24, 2014
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