A firm has just paid a dividend of $1.5 per share (Do = $1.5) and its...

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A firm has just paid a dividend of $1.5 per share (Do = $1.5) and its common stock now sells for $25 per share. The firm's dividend growth rate is 10% every year. The firm plans to issue the new common stock and the percentage flotation cost required to sell the new common stock is 12%. What is the firm's cost of new common stock, ke? A firm has just paid a dividend of $1.5 per share (Do = $1.5) and its common stock now sells for $25 per share. The firm's dividend growth rate is 10% every year. The firm plans to issue the new common stock and the percentage flotation cost required to sell the new common stock is 12%. What is the firm's cost of new common stock, ke?

Answer rating: 100% (QA)

Calculating the cost of new common stock ke Given Current dividend Do 15 Current stock pric... View the full answer