REF’s EPS in current year (2020) is $12. It was $8 in year 2015. The company pays out 40% of its earnings as dividends, and the stock sells for $36. Floatation cost is $2.5/share. What is REF’s cost of retained earnings? What is REF’s cost of new common stock?
REF’s EPS in current year (2020) is $12. It was $8 in year 2015. The company pays out 40% of its earnings as dividends, and the stock sells for $36. Floatation cost is $2.5/share. What is REF’s cost of retained earnings? What is REF’s cost of new common stock?
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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REF’s EPS in current year (2020) is $12. It was $8 in year 2015. The company pays out 40% of its earnings
as dividends, and the stock sells for $36. Floatation cost is $2.5/share. What is REF’s cost of
earnings
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