1 haroldson inc common stock is selling for 22 per share, Ask an Expert

Finance

1. Haroldson Inc. common stock is selling for $22 per share. The last dividend was $1.20, and dividends are expected to grow at a 6% annual rate. Flotation costs on new stock sales are 5% of the selling price. What is the cost of Haroldson Inc.'s new common stock?

2. XYZ Inc. will issue new common stock to finance an expansion. The existing common stock just paid a $2.50 dividend, and dividends are expected to grow at a constant rate of 6% indefinitely. The stock sells for $32, and flotation expenses of 6% of the selling price will be incurred on new shares. What is the cost of internal equity?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92818196

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