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Retained earnings versus new common stock Using the data for a firm shown in the following table, calculate the cost of retained earings and the
Retained earnings versus new common stock Using the data for a firm shown in the following table, calculate the cost of retained earings 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 $53.00 Projected Dividend dividend per growth rate share next year 8% $2.12 Underpricing Flotation cost per share per share $2.50 $2.00 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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