Twister corporation is expected to pay a dividend of 7 per


Twister Corporation is expected to pay a dividend of $7 per share one year from now on its common stock, which has a current market price of $143. Twister’s dividends are expected to grow at 13 percent.

a.  Calculate the cost of the company’s retained earnings.

b.  If the flotation cost per share of new common stock is $4, calculate the cost of issuing new common stock.

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Financial Management: Twister corporation is expected to pay a dividend of 7 per
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