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7. Problem 10.07 (Cost of Common Equity with and without Flotation) eBook The Evanec Company's next expected dividend, D 1 , is $3.99; its growth

7. Problem 10.07 (Cost of Common Equity with and without Flotation)

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The Evanec Company's next expected dividend, D1, is $3.99; its growth rate is 7%; and its common stock now sells for $31.00. New stock (external equity) can be sold to net $24.80 per share.

  1. What is Evanec's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places. rs = %
  3. What is Evanec's percentage flotation cost, F? Round your answer to two decimal places. F = %
  5. What is Evanec's cost of new common stock, re? Do not round intermediate calculations. Round your answer to two decimal places. re = %

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