you have found a firm that has free cash flows to equity of 2.5 million next year. valueline reports a growth rate in free cash flows of 4.5% forever. the book value per share for the company is 2$ and compannys shares currently trade for 2.31$ per share. if float costs are 9% and the firm has 1 million shares, what is the cost of external equity for this firm?

Answer rating: 100% (QA)

To find the cost of external equity re we can use the Gordon Growth Model also known as the Dividend ... View the full answer