Question
Using the data for a firm shown in the followingtable, calculate the cost of retained earnings and the cost of new common stock using theconstant-growth
Using the data for a firm shown in the followingtable, calculate the cost of retained earnings and the cost of new common stock using theconstant-growth valuation model.(Click on the icon located on thetop-right corner of the data table below in order to copy its contents into aspreadsheet.)
| Current market price per share | Dividend growth rate | Projected dividend per share next year | Underpricing per share | Flotation cost per share | |
| $56.00 | 9% | $1.68 | $2.50 | $2.25 |
The cost of retained earnings is nothing %. (Round to two decimalplaces.)
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Fundamental accounting principle
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
21st edition
1259119831, 9781259311703, 978-1259119835, 1259311708, 978-0078025587
