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Cost of common stock equity Ross Textiles wishes to measure its cost of common stock equity. The firm's stock is currently selling for exist57.50. The
Cost of common stock equity Ross Textiles wishes to measure its cost of common stock equity. The firm's stock is currently selling for exist57.50. The firm expects to pay a exist3.40 dividend at the end of the year (2016). The dividends for the past 5 years are shown in the following table. After underpricing and flotation costs, the firm expects to net exist52 per share on a new issue. a. Determine the growth rate of dividends from 2011 to 2015. b. Determine the net proceeds, N_n, that the firm will actually receive. c. Using the constant growth valuation model, determine the cost of retained earnings, r_r d. Using the constant-growth valuation model, determine the cost of new common stock, r_n
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