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?

Answer rating: 100% (QA)

Underwriting fee per share 225 per share Issue price per share 47 Cost per share Iss... View the full answer