Clarke Equipment currently pays a common stock dividend of $3.50 per share. The common stock rice is

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Clarke Equipment currently pays a common stock dividend of $3.50 per share. The common stock rice is $60. Analysts have forecast that earnings and dividends will grow at an average annual rate of 6.8 percent for the foreseeable future.

a. What is the marginal cost of retained earnings?

b. What is the marginal cost of new equity if the issuance costs per share are $3?

Related Book For answer-question

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1337614689

9th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

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Posted Date: Nov 16, 2023 03:23 AM

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Clarke Equipment currently pays a common stock dividend of $3.50 per share. The common stock rice is

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To calculate the marginal cost of retained earnings r you can use the Gordon Growth Model which is g... View the full answer

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

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