Multiple Choice
Grandview Inc.will issue new common stock to finance an expansion.The existing common stock just paid a $1.50 dividend,and dividends are expected to grow at a constant rate 8% indefinitely.The stock sells for $45,and flotation expenses of 5% of the selling price will be incurred on new shares.What is the cost of retained earnings for Grandview?
A) 11.33%
B) 11.51%
C) 11.60%
D) 11.79%
E) 12.53%
Correct Answer:
Verified
Correct Answer:
Verified
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