Question
Jiffy Co. expects to pay a dividend of $3.00 per share within one year. The current price of Jiffy common stock is $60 per share.
Jiffy Co. expects to pay a dividend of $3.00 per share within one year. The current price of Jiffy common stock is $60 per share. When Jiffy issues new stock, the IPO cost is $3.00 per share. If long-term growth in dividends is estimated to be 8 percent indefinitely,
Calculate
1) the cost of internal common stock (retained earnings)
2) the cost of new common stock?
Step by Step Solution
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Step: 1
To calculate the cost of internal common stock retained earnings we can use the dividend ...
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Principles Of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
13th Edition
9780132738729, 136119468, 132738724, 978-0136119463
