USWAG Company is preparing to issue common stock. The company is attempting to estimate the cost of common stock. The company paid dividend of P5.25. The current market price reflects a 15% expected annual return on investors. Dividends are expected to grow at a constant rate of 10% per year. Flotation costs on the new issue will be P3.75 per share. What is the cost of new common stock?

Answer rating: 100% (QA)

To calculate the cost of new common stock we can use the Dividend Growth Model also known as the Gor... View the full answer