Assignment:
1. Paid a dividend yesterday of $1.50 per share. The dividend is expected to grow at a constant rate of 7 % per year. The price of common stock today is $19 per share. If the company decides to issue new common stock, flotation costs will equal $1.00 per share. The company's marginal tax rate is 35%. The cost of retained earning is?
2. The cost of new common stock is?