Question: complete the problem using Excel formula P-17: Costs of retained earnings and new common stock (LO11-3) Compute K,andKn under the following circumstances: o. b. D1=$5.00,P0=$70,g=8%,F=$7.00.D1=$0.22,P0=$28,g=7%,F=$2.50.
P-17: Costs of retained earnings and new common stock (LO11-3) Compute K,andKn under the following circumstances: o. b. D1=$5.00,P0=$70,g=8%,F=$7.00.D1=$0.22,P0=$28,g=7%,F=$2.50. c. E1 (earnings at the end of period one) =$7, payout ratio equals 40 percent, P0=$30, g=6.0%,f=$2.20. d. D0 (dividend at the beginning of the first period) =$6, growth rate for dividends and earnings (g)=7%,P0=$60,F=$3. NOTE: Common stock financing is available through the retention of earnings belonging to curfent stockholders or by issuing new common stock; the latter is more costly due to the "Float" or selling cost
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