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Common stock sells for $62.he new issue of stocks have flotation costs of 9 percent.The company pays 70percent of its earnings in dividends and a $5.60 was recently paid.Earnings per share 5 years ago was $6.00.Earnigs are expected to grow at the same 5 year rate.The marginal tax rate is 38 percent.

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Question: What is the cost of internal common equity?

Question: What is the cost of external common equity?

Note: Please provide reasons to support your answer.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91148510

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