Tools Window Help Lecture 2 Cost of capital.pdf (page 4 of EXTERNAL EQUITY Suppose IBM just paid $12 of dividend last year and is expected to grow its dividend by 5% per year. It faces 4% floatation cost for issuing new common stock. Investors pay $200 per share, how much does IBM receive? What is the cost of IBM Internal equity? What is the cost of IBM external equity? Which type of equity is more expensive, internal or external? BREAK POINT IN RE What happens after you used up your internal equity