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 $2.77; its growth rate is 6%; and its common stock now sells for $38. New stock (external equity) can be sold to net $36.10 per share.

What is Evanec's cost of retained earnings, r_s? Round your answer to two decimal places. Do not round your intermediate calculations.

r_s = %

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, r_e? Round your answer to two decimal places. Do not round your intermediate calculations.

r_e = %

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92865350

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