JP Morgan Corporation's stock currently trades at $100 per share, the stock expects to pay an $8 dividend this year and the stock has a perpetual growth rate of 5%. What is the cost of new common equity if JP Morgan pays 6% in flotation costs?

JP Morgan Corporation's stock currently trades at $100 per share, the stock expects to pay an $8 dividend this year and the stock has a perpetual growth rate of 5%. What is the cost of new common equity if JP Morgan pays 6% in flotation costs?

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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