Question: I understand how to find external equity with the equation: re= D1/(P0(1-F))+g. How do I find/ what is g in this problem? 7. Messman Manufacturing

I understand how to find external equity with the equation: re=

I understand how to find external equity with the equation: re= D1/(P0(1-F))+g. How do I find/ what is g in this problem?

D1/(P0(1-F))+g. How do I find/ what is g in this problem? 7.

7. Messman Manufacturing will issue common stock to the public for $30. The expected dividend one year from today is $3.00 per share, and the expected earnings is $6.00 per share. ROE is expected to be 12%. If the flotation cost is 10% of the issue's gross proceeds, what is the cost of external equity, re? a. 6.00% b. 16.00% C. 17.11% d. 22.00% e. 23.11%

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