Cost of common equity with and without flotationthe evanec, Ask an Expert

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Cost of Common Equity with and without Flotation

The Evanec Company's next expected dividend, D1, is $3.60; its growth rate is 5%; and its common stock now sells for $32. New stock (external equity) can be sold to net $30.40 per share.

What is Evanec's cost of retained earnings, rs? Round your answer to two decimal places.

rs = %

What is Evanec's percentage flotation cost, F? Round your answer to two decimal places.

F = %

What is Evanec's cost of new common stock, re? Round your answer to two decimal places.

re = %

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