Compute the cost of capitala new common stock issue that, Ask an Expert

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Compute the cost of capital

A new common stock issue that paid a $1.80 dividend last year. The par value of the stock is $15, and EPS have grown at a rate of 7% per year. The growth rate is expected to continue into the foreseeable future. The company maintains a constant dividend- earnings ratio of 30%. The price of this stock is now $27.50 nut 5 percent flotation costs (as a percent of market price) are anticipated.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92360250

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