Provide correct answer do fast general Accounting Expected cash dividends are $2, thedividend yield is 6%, flotation costs are 3%of price, and the growth rate is 4%.Compute the approximate cost of newcommon stock.a. 12.29%b. 11.19%c. 10.19%d. 9.94%

Step 1: Calculate the current stock priceStep 2: Adjust the stock price for flotation costsStep 3:…

Answered: Expected cash dividends are $2, the…

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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If Do= $2.25, g (which is constant) = 3.5%, and Po= $44, what is the stock's expected dividend yield for the coming year? Select the correct answer. Oa. 4.15% b. 4.53% O c. 5.29% d. 4.91% O e. 5.67%
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Expected cash dividends are $2, the dividend yield is 6%, flotation costs are 3% of price, and the growth rate is 4%. Compute the approximate cost of new common stock. a. 12.29% b. 11.19% c. 10.19% d. 9.94%