Company A has a bond yield of 10% and risk premium over its bonds of 4%....

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Company A has a bond yield of 10% and risk premium over its bonds of 4%. What is the required rate of return on stock (retained earnings in this example)? Company A doesn't have enough retained earnings to expand operations, so it is going to raise capital from new stock. It pays a $4 dividend and currently has a stock price of $100. It has an expected growth rate of 2%. Flotation costs are 10%. What is the required rate of return for new common stock? Company A has a bond yield of 10% and risk premium over its bonds of 4%. What is the required rate of return on stock (retained earnings in this example)? Company A doesn't have enough retained earnings to expand operations, so it is going to raise capital from new stock. It pays a $4 dividend and currently has a stock price of $100. It has an expected growth rate of 2%. Flotation costs are 10%. What is the required rate of return for new common stock?