Hi,

I'm having trouble with working out finding the cost of external equity and cost of internal equity for newly issued shares.

The original information:

70,000 ordinary shares with a current market price of $22 per share. The company has picked up some contracts over the last few years, with growth in earnings, averaging 8.2 per cent per year. You expect with current opportunities that this might continue for two more years, but then slow to 3% or 4%. The company directors have just declared a dividend of $2.25 per share for the last 12 months.

I was able to work out the cost of common stock with the information provided using an excel model.

I'm having trouble with knowing where to deduct the issuance cost for newly issued common stock