Problemgravelys stock price is currently 3425 and the, Ask an Expert

Accounting

Problem:

Gravely's stock price is currently $34.25 and the current quarterly dividend is $0.25. Consensus estimates for Gravely indicate a growth rate in earnings of 10% into the foreseeable future.

Required:

Question: If Gravely plans to sell 1 million shares to raise new capital for expansion, what is the cost of new equity if the issuance (flotation) costs are 8%?

Note: Please show guided help with steps and answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91169066

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