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Sun Instruments expects to issue new stock at $39 a share with estimated flotation costs of 6 percent of the market price. The company currently pays a $2.30 cash dividend and has a 7 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 $39 a share with estimated flotation costs of 6 percent of the market price. The company currently pays a $2.30 cash dividend and has a 7 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: % %

EBK CFIN
EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter11: The Cost Of Capital
Section: Chapter Questions
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2. Problem 21-02 Problem 21-02 eBook Sun Instruments expects to issue new stock at $39 a share with estimated flotation costs of 6 percent of the market price. The company currently pays a $2.30 cash dividend and has a 7 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: % %
Transcribed Image Text:2. Problem 21-02 Problem 21-02 eBook Sun Instruments expects to issue new stock at $39 a share with estimated flotation costs of 6 percent of the market price. The company currently pays a $2.30 cash dividend and has a 7 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: % %
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