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The following financial information is available on Rawls Manufacturing Company: Current per share market price $48.00 Current (t = 0) per share dividend $3.50 Expected
The following financial information is available on Rawls Manufacturing Company:
Current per share market price | $48.00 |
Current (t = 0) per share dividend | $3.50 |
Expected long-term growth rate | 5.0% |
Rawls can issue new common stock to net the company $44 per share. Determine the cost of internal equity capital using the dividend capitalization model approach. (Compute answer to the nearest 0.1%).
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