Question: Suppose Goodwill Technologies Inc. has decided to issue new common stock to satisfy the long term financing requirement. The current market price of the stock

Suppose Goodwill Technologies Inc. has decided to issue new common stock to satisfy the long term financing requirement. The current market price of the stock (P0) is $50, the expected dividend (D1), $4, and the expected growth rate of dividend, (g) is 5%. In order to sell its new issue in the competitive stock market, the company decides to sell at $47 per new issue of common stock. It is also found that, the company has to incur underwriting fee of $2.5 per share. Find out the cost of new issues of common stock?

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