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Barton Electronics wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay dividends (D1) of $1.20
Barton Electronics wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay dividends (D1) of $1.20 per share, and the current price of its common stock is $30 per share. The expected growth rate is 9 percent. a. Compute the cost of retained earnings (Ke). Use formula 11-6 on page 338. b. If a $2 flotation cost is involved, compute the cost of new common stock (Kn). Use Formula 11-7 on page 339
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