What is the cost of new equity assuming the firm's stock price is currently selling for $10 and will pay a dividend of $2 next year.  The firm expects constant growth of 9.47% and floatation costs associated with the new equity issue of 20%. Write your answer as a decimal.

Answer rating: 100% (QA)

To calculate the cost of new equity we use the dividend growth model also known as the ... View the full answer