Question
Ford Motor Company issued common stock at $80 per share. The expected dividend per share at the end of the year is $6.0 and is
Ford Motor Company issued common stock at $80 per share.
The expected dividend per share at the end of the year is $6.0 and is expected to grow at 4% annually.
Required:
(a) How much will be the expected rate of return on common stock?
(b) If Ford Motor issues new common stock at flotation cost of $2, how much will the cost of new common stock be? Why does cost change?
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ISE Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Cornett, Otgo Erhemjamts
8th International Edition
1265561435, 9781265561437
