Sun Instruments expects to issue new stock at $38 a share with estimated flotation costs of 7 percent of the market price. The company currently pays a $2.50 cash dividend and has a 4 percent growth rate. What are the costs of retained earnings and new common stock? Round your answers to two decimal places. Costs of retained earnings: % Cost of new common stock: %
Sun Instruments expects to issue new stock at $38 a share with estimated flotation costs of 7 percent of the market price. The company currently pays a $2.50 cash dividend and has a 4 percent growth rate. What are the costs of retained earnings and new common stock? Round your answers to two decimal places. Costs of retained earnings: % Cost of new common stock: %
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 2P
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Sun Instruments expects to issue new stock at $38 a share with estimated flotation costs of 7 percent of the market price. The company currently pays a $2.50 cash dividend and has a 4 percent growth rate. What are the costs of
Costs of retained earnings: %
Cost of new common stock: %
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