A company's common stock currently sells for $22.50 per share, the expected dividend for the coming year is $1.92, and is expected omtant growth rate 6.00 New ock can be price, hut a flotation cost of 8% would be incurred. By how much would the cost of new mock exceed the cost of retained earnings? De cot round your immermediune callations

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A company's common stock currently sells for $22.50 per share, the expected dividend for the coming year is $1.92, and is expected
growth rate is 100% New stock can be
price, but a flotation cost of 8% would be incurred. By how much would the cost of new mock exceed the cost of retained earnings? De cot round your intermediate calculations
OA.34%
Ob 6³%
0.35%
04.09%
○● 32%
Transcribed Image Text:A company's common stock currently sells for $22.50 per share, the expected dividend for the coming year is $1.92, and is expected growth rate is 100% New stock can be price, but a flotation cost of 8% would be incurred. By how much would the cost of new mock exceed the cost of retained earnings? De cot round your intermediate calculations OA.34% Ob 6³% 0.35% 04.09% ○● 32%
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