COST OF EQUITY WITH AND WITHOUT FLOTATION Javits & Sons common stock currently trades at $30 00

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COST OF EQUITY WITH AND WITHOUT FLOTATION Javits & Sons’ common stock currently trades at $30 00 a share. It is expected to pay an annual dividend of $3 00 a share at the end of the year D1 $3 00 , and the constant growth rate is 5% a year.

a. What is the company’s cost of common equity if all of its equity comes from retained earnings?

b. If the company issued new stock, it would incur a 10% flotation cost. What would be the cost of equity from new stock?

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Fundamentals Of Financial Management Concise Edition

ISBN: 9781285065137

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Authors: Eugene F. Brigham, Joel F. Houston

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Question Posted: Jul 15, 2024 10:09 AM

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COST OF EQUITY WITH AND WITHOUT FLOTATION Javits & Sons common stock currently trades at $30 00

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Fundamentals Of Financial Management Concise Edition

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