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Greenwood Technology's common stock is presently trading at $ 3 7 . 5 0 per share. The firm anticipates an earnings per share ( EPS
Greenwood Technology's common stock is presently trading at $ per share. The firm anticipates an earnings per share EPS of $ for the current year, with an expected payout ratio of and a constant growth rate in dividends of If Greenwood Technology decides to issue new shares to the public at the current price, it will incur flotation costs of a Explain how flotation costs affect the cost of new equity compared to retained earnings, and why companies might still opt to issue new stock despite these costs. marksb Discuss the impact of dividend payout ratios and growth rates on a company's dividend policy and its implications for shareholder value. marksc Calculate the cost of retained earnings for Greenwood Technology using the Dividend Growth Model. marksd Determine the cost of new equity considering the flotation costs, and calculate by how much the cost of new stock exceeds the cost of retained earnings. marks
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