A firm is a common stock with the market price of $100 per share in an expected dividend of $5.61 per share at the end of the coming year a new issue of style is expected to be sold for $98 with two dollar per share representing the underpricing necessary and a competitive Capital Market flotation costs are expected to total one dollar appreciate the dividends paid on the outstanding stock over the past five years are as follows your 14 dollars here to four dollars and 28 sent you 34 dollars and 58 sent you for four dollars and 90 sent you five $5.24 cost of this new issue of common stock is?

Answer rating: 100% (QA)

To calculate the cost of the new issue of common stock we need to consider th... View the full answer