A firm plans to pay $2.10 in dividends per share next year. It expects the...
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A firm plans to pay $2.10 in dividends per share next year. It expects the dividends to grow at a constant rate of 5% per year. It plans to issue new common stock at a current market price of $50 per share market and will pay $5 per share in floatation cost. Find the current cost of retained earnings, which is part of common equity.
A. 6.9%
B. 7.2%
C. 8.8%
D. 9.2%
E. None of the above
ABC Inc. plans to pay $2.10 in dividends per share next year. It expects the dividends to grow at a constant rate of 5% per year. It plans to issue new common stock at a current market price of $50 per share market and will pay $5 per share in floatation cost. Find its cost of new common equity
A. 10.23% B. 9.67% C. 8.89% D. 8.60% E. None of the above
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