Cost of Equity from New Stock Assignment | Homework For You
June 3rd, 2020
Javits & Sons’ common stock currently trades at $31.50 a share. It is expected to pay an annual dividend of $2.40 a share at the end of the year, and the constant growth rate is 4.40% a year. a. What is the company’s cost of common equity if all of its equity comes from retained earnings? b. If the company issued new stock, it would incur a 20.70% flotation cost. What would be the cost of equity from new stock?

a)12.019%; b)14.008% a)12.019%; b)14.431% O a)12.354%; b)13.285% a)3.600%; b)20.100% O a)12.354%; b)14.008%. Get Finance homework help today