Question
Your company expects to pay $5 per-share dividend at the end of a year from today. This dividend is expected to steadily grow at 4%
Your company expects to pay $5 per-share dividend at the end of a year from today. This dividend is expected to steadily grow at 4% per year forever. The current stock price is $80 per share and issuing new stock will require 7% issuing and underwriting expenses.
What is the cost of new common share equity?
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Fundamentals of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
1st canadian edition
978-0133400694
