Using the data for a firm shown in the following table, calculate the cost of retained...
Using the data for a firm shown in the following table, calculate the cost of retained earnings and the cost of new common stock using the constant-growth valuation model. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)
|
Current market price per share |
Dividend growth rate |
Projected dividend per share next year |
Underpricing per share |
Flotation cost per share |
|
||||||||||
|
$50.0050.00 |
88% |
$2.252.25 |
$2.002.00 |
$1.001.00 |
|||||||||||
a. The cost of retained earnings is ____%
(Round to two decimal places.)
b. cost of new common stock __ %
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