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Trahern Baking Co. common stock sells for $55.07 per share. Dividends are expected to be $3.23 per share next year and will grow at a
Trahern Baking Co. common stock sells for $55.07 per share. Dividends are expected to be $3.23 per share next year and will grow at a constant rate of 8% indefinitely. New stock can be sold to the public at the current price, but a flotation cost of 7% would be incurred. What would be the cost of equity from new common stock? Submit your answer as a percentage and round to two decimal places (Ex. 0.00%).
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Correct Answer: | 14.31 |
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