Question
9-3. (Cost of equity) In early 2016, Alfa Corporation issued new common stock at a market price of $30. Dividends last year were $2.00 and
9-3. (Cost of equity) In early 2016, Alfa Corporation issued new common stock at a market price of $30. Dividends last year were $2.00 and are expected to grow at an annual rate of 3 percent forever. Floatation costs will be 4 percent of market price. What is Alfas cost of equity for the new issue?
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N Hyman
10th Edition
053875446X, 978-0538754460
