Question: Retained earnings versus new common stock Using the data for a firm shown in the following table, calculate the cost of retained earnings and the

Retained earnings versus new common stock Using the data for a firm shown in the following table, calculate the cost of retained earnings and the cost of new common stock using the constant-growth valuation model

Current market

price per share

Dividend

growth rate

Projected

dividend per

share next year

Underpricing

per share

Flotation cost

per share

$51.00

7%

$2.04

$1.50

$2.50

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