The firm cost of a new issue of common stock ?

The firms cost of retained earnings is ?

14. A firm has determined its optimal I capital structure which is composed of the following sources and target market value proportions Source of Capital Long-term debt Preferred stock Common stock equit Target Market Proportions 20% 10 70 Debt: The firm 2 percent of the face value would be required in addition to the discount of $40. Preferred Stock: The firm has determined it can issue preferred stock at $75 per share par stock will pay a $10 annual dividend. The cost of issuing and selling the stock is $3 per share. Common Stock: A firm's common stock is currently selling for $18 per share. The dividen to be paid at the end of the coming year is $1.74. Its dividend payments have been growing at a constant rate for the last four years. Four years ago, the dividend was $1.50. It is expected that to can sell a 12-year, $1,000 par value, 7 percent bond for $960. A flotation cost of value. Th d expecte w common stock issue must be underpriced $1 per share in floatation costs. Additionally, the firm's marginal tax rate is 40 percent