Question
Retained earnings versus new common stock?? Using the data for a firm shown in the following? table, calculate the cost of retained earnings and the
Retained earnings versus new common stock?? Using the data for a firm shown in the following? table, calculate the cost of retained earnings and the cost of new common stock using the? constant-growth valuation model.???(Click on the icon located on the? top-right corner of the data table below in order to copy its contents into a?spreadsheet.)
Current market price per share | Dividend growth rate | Projected dividend per share next year | Underpricing per share | Flotation cost per share |
|
?$43.00 | 6?% | ?$2.15 | ? $2.50 | ? $1.75 |
a. The cost of retained earnings is %. ?(Round to two decimal? places.)
b.??The cost of new common stock is %. ?(Round to two decimal? places.)
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