Question
Luke A. Manufacturing paid a dividend yesterday of $7 per share (D0 = $5). The dividend is expected to grow at a constant rate of
Luke A. Manufacturing paid a dividend yesterday of $7 per share (D0 = $5). The dividend is expected to grow at a constant rate of 7% per year. The price of Luke A. Manufacturing's stock today is $22 per share. If Luke A. Manufacturing decides to issue new common stock, flotation costs will equal $2.50 per share. Based on the above information, the cost of new common stock is __________.
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Financial Times Guide To The Financial Markets
Authors: Glen Arnold
1st Edition
0273730002, 978-0273730002
