6. Problem 10.07 (Cost of Common Equity with and without Flotation)

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The Evanec Company's next expected dividend, D₁, is $2.63; its growth rate is 5%; and its common stock now sells for $40.00. New stock (external equity) can be sold to net $36.00 per share.

1. What is Evanec's cost of retained earnings, r_s? Do not round intermediate calculations. Round your answer to two decimal places.

   r_s = %

2. What is Evanec's percentage flotation cost, F? Round your answer to two decimal places.

   F = %

3. What is Evanec's cost of new common stock, r_e? Do not round intermediate calculations. Round your answer to two decimal places.

   r_e = %

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Keep the Highest: 1/3 Attempts: 1 6. Problem 10.07 (Cost of Common Equity with and without Flotation) ook The Evanec Company's next expected dividend, D1, is $2.63; its growth rate is 5%; and its common stock now sells for $40.00. New stock (external equity) can be sold to net $36.00 per share. a. What is Evanec's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places. rs = b. What is Evanec's percentage flotation cost, F? Round your answer to two decimal places. F = c. What is Evanec's cost of new common stock, re? Do not round intermediate calculations. Round your answer to two decimal places re =