Barton Industries expects next year's annual dividend, D1, to be $1.70 and it expects dividends to grow
Fantastic news! We've Found the answer you've been seeking!
Question:
Barton Industries expects next year's annual dividend, D1, to be $1.70 and it expects dividends to grow at a constant rate gL= 4.9%. The firm's current common stock price, P0, is $25.00. If it needs to issue new common stock, the firm will encounter a 4.7% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. What is the flotation cost adjustment that must be added to its cost of retained earnings? Round your answer to 2 decimal places. Do not round intermediate calculations.
What is the cost of new common equity? Round your answer to 2 decimal places. Do not round intermediate calculations.
Posted Date: