d. The current price of the stock is $12. Using the growth rate (g) from part a and (D1) from part c, compute Ke. Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Ke % e. If the flotation cost is $1.50, compute the cost of new common stock (Kn) using growth rate (g) from part a and dividend (D1) from part c. Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Kn %

d. The current price of the stock is $12. Using the growth rate (g) from part a and (D1) from part c, compute Ke. Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Ke % e. If the flotation cost is $1.50, compute the cost of new common stock (Kn) using growth rate (g) from part a and dividend (D1) from part c. Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Kn %

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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he total revenue numbers over the past 4 years for Tag-It Corporation were as follows (values in millions):73,78569,49575,35671,879Determine whether you think Tag-It can hit the target of a 12% increase in sales next year.
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