Blue Co. just paid a P2 per share dividend on its common stock. The dividend is expected to grow at a constant rate of 7% Annually. If the company issues additional stock, it must pay its investment banker a flotation cost of P1 per share. If the current stock sells for P42 each, what is the cost of issuing new external equity? a. 11.51% b. 11.88% c. 12.11% d. 12.22%

Blue Co. just paid a P2 per share dividend on its common stock. The dividend is expected to grow at a constant rate of 7% Annually. If the company issues additional stock, it must pay its investment banker a flotation cost of P1 per share. If the current stock sells for P42 each, what is the cost of issuing new external equity? a. 11.51% b. 11.88% c. 12.11% d. 12.22%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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