Blue Co.’s stock sells for P40 per stock with last dividend amounted to P4. The growth rate is will remain the same in the foreseeable future at 2%. Blue Co. will incur a flotation cost of 10% on selling new ordinary stocks in the primary market. Compute for Blue Co. cost of new equity.

Blue Co.’s stock sells for P40 per stock with last dividend amounted to P4. The growth rate is will remain the same in the foreseeable future at 2%. Blue Co. will incur a flotation cost of 10% on selling new ordinary stocks in the primary market. Compute for Blue Co. cost of new equity.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The next dividend payment by Parkway Construction Bhd will be RM2.35 per share. The dividends are anticipated to maintain a 4.5 percent growth rate forever. The stock currently sells for RM70 per share. What is the dividend yield?
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