Cost of common stock equity Ross Textiles wishes to measure its cost of common stock equity. The firm's stock is currently selling for

$76.74

The firm just recently paid a dividend of

$4.02

The firm has been increasing dividends regularly. Five years ago, the dividend was just

$2.99

After underpricing and flotation costs, the firm expects to net

$67.53

per share on a new issue.

a.Determine average annual dividend growth rate over the past 5 years. Using that growth rate, what dividend would you expect the company to pay next year?

b.

Determine the net proceeds,

Nn,

that the firm will actually receive.c.Using the constant-growth valuation model, determine the required return on the company's stock,

r Subscript srs,

which should equal the cost of retained earnings,

r Subscript rrr.

d.Using the constant-growth valuation model, determine the cost of new common stock,

r Subscript nrn.

a.The average annual dividend growth rate over the past 5 years is

nothing%.

(Round to two decimal places.)

Score: 0 of 1 pt 7of 11 (complete HW Score: 25.76%, 2.83 of 11 pts P9-10 (similar to) Question Help Cost of common stock equity Ross Todes wishes to measures cost of common stock equity. The firm's stock is currently seling for $76.74. The firm just recently paid a dividend of 1.02 The firm has been increasing dividends regularly Five years ago, the dividend was $2.99 Aer underpring and cost them expects to 567,53 por share on a wise Determine average annual dividend growth rate over the past 5 years. Using the growth rate what dividend would you expect the company to pay next year? Determine the procedural them will receive e. Using the contgrowtain model determine the required our on the company's , which should the cost of retained eaming, Using the growth won mod e the cost of work , a. The average annual dividend growth over the past 5 years is (Round to two decimal places)