A firm wishes to issue new shares of its stock, which already trades in the market. The
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A firm wishes to issue new shares of its stock, which already trades in the market. The current stock price is $33, the most recent dividend was $3 per share, and the dividend is expected to grow at a rate of 4% forever. Flotation costs for this issue are expected to be 14%.
What is the required rate of return (or financing cost) in this new issue?
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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