Company XYZ plans to issue new common stock. They expects to issue a dividend of $2.64...

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Company XYZ plans to issue new common stock. They expects to issue a dividend of $2.64 on this common stock at the end of the year. The company anticipates that these dividends will continue to grow at a constant rate of 4.3% each year indefinitely. The company's plans to issue this common stock at a price of $49.92. The stock will be issued with a flotation cost of 9%. What is this company's cost of external equity (re)? Enter your answer as a decimal with a leading zero and 4 decimal places of precision (i.e. 0.1234) Company XYZ plans to issue new common stock. They expects to issue a dividend of $2.64 on this common stock at the end of the year. The company anticipates that these dividends will continue to grow at a constant rate of 4.3% each year indefinitely. The company's plans to issue this common stock at a price of $49.92. The stock will be issued with a flotation cost of 9%. What is this company's cost of external equity (re)? Enter your answer as a decimal with a leading zero and 4 decimal places of precision (i.e. 0.1234)

Answer rating: 100% (QA)

The cost of external equity re can be calculated using the Gordon Grow... View the full answer