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Suppose a company issues common stock to...
This question was answered on Aug 10, 2012. View the Answer
Suppose a company issues common stock to the public for $25 a share. The expected dividend is $2.50 per share and the growth in dividends is 8%. If the flotation cost is 10% of the issue proceeds, compute the cost of external equity, re.

Then

Calculate the cost of preferred stock (rPS) with the given information:
Par Value = $200
Current Price = $208
Flotation Cost = $16
Annual Dividend = 12% of Par


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Finance - 8332677.xls

Suppose a company issues common stock to the public for $25 a share. The expected dividend is $2.50 per share and the growth in dividends is 8%. If the flotation cost is

10% of the issue proceeds,...

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