Question: 7. Problem 10.07 (Cost of Common Equity with and without Flotation) eBook The Evanec Company's next expected dividend, D 1 , is $3.49; its growth

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

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The Evanec Company's next expected dividend, D1, is $3.49; its growth rate is 6%; and its common stock now sells for $34.00. New stock (external equity) can be sold to net $30.60 per share.

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

    rs = %

  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, re? Do not round intermediate calculations. Round your answer to two decimal places.

    re = %

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