Costly Corporation is considering using equity financing. Currently, the firm's stock is selling for $31.00 per share.
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Costly Corporation is considering using equity financing. Currently, the firm's stock is selling for $31.00 per share. The firm's dividend for next year is expected to be $4.30 with an annual growth rate of 6.0% thereafter indefinitely. If the firm issues new stock, the flotation costs would equal 13.0% of the stock's market value. The firm's marginal tax rate is 40%. What is the firm's cost of external equity?
Related Book For
Using Microsoft Excel and Access 2016 for Accounting
ISBN: 978-1337109048
5th edition
Authors: Glenn Owen
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