National Co. has insufficient retained earnings to fund capital expenditures and decided to issue new common...
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National Co. has insufficient retained earnings to fund capital expenditures and decided to issue new common shares. National Co.'s share currently has a price of P33 per share and has a projected year-end dividend of P6 per share. The dividend is expected to grow at 2% annually forever. The cost of new equity is determined at 22%. What is the floatation cost in peso? National Co. has insufficient retained earnings to fund capital expenditures and decided to issue new common shares. National Co.'s share currently has a price of P33 per share and has a projected year-end dividend of P6 per share. The dividend is expected to grow at 2% annually forever. The cost of new equity is determined at 22%. What is the floatation cost in peso?
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To calculate the flotation cost we need to consider the cost of issuing new equity and the growth ra... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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