White Lion Homebuilders has a current stock price of $33.35 per share and is expected to pay a dividend per share of $2.03 by the end of next year. The company's earnings and dividend growth rate are expected to grow at a constant rate of 8.70% for the foreseeable future. If White Lion expects to incur flotation costs of 3.750% of the value of its newly raised equity funds, then the float-adjusted (net) cost of its new common shares (rounded to two decimal places) should be:

Answer rating: 100% (QA)

To calculate the floatadjusted net cost of White Lion Homebuilders new common shares we need to consider the flotation costs and the growth rate Flota... View the full answer