7. A firm is thinking of raising funds by the issuance of equity capital. The current market...
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7. A firm is thinking of raising funds by the issuance of equity capital. The current market price of the firm's share is 150. The firm is expected to pay a dividend of 3.55 next year. The firm has paid dividend in past years as follows: Dividend per Share () Year 2009 2.00 2010 2.20 2011 2.42 2012 2.66 2013 2.93 2014 3.22 The firm can sell shares for 140 each only. In addition, the flotation cost per share is 10. Calculate the cost of new issue.
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