Question
If a company's common stock sells for $25/share, carries a dividend this year of $2.50 with an expected growth rate of 8% per year, and
If a company's common stock sells for $25/share, carries a dividend this year of $2.50 with an expected growth rate of 8% per year, and new stock will have a flotation cost of $5/share, the cost of new equity to the company will be:
| a. | 10.8%. | |
| b. | 19.5%. | |
| c. | 23.5% | |
| d. | 18%. | |
| e. | none of the above. |
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Business Law With UCC Applications
Authors: Gordon Brown, Paul Sukys
13th Edition
0073524956, 978-0073524955
