What is the companys cost of common equity if all of its


Cost of Equity with and without Flotation

Jarett & Sons's common stock currently trades at $21.00 a share. It is expected to pay an annual dividend of $2.75 a share at the end of the year (D1 = $2.75), and the constant growth rate is 4% a year.

What is the company's cost of common equity if all of its equity comes from retained earnings? Round your answer to two decimal places. Do not round your intermediate calculations.

%

If the company issued new stock, it would incur a 17% flotation cost. What would be the cost of equity from new stock? Round your answer to two decimal places. Do not round your intermediate calculations.

%

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What is the companys cost of common equity if all of its
Reference No:- TGS02384088

Expected delivery within 24 Hours