Essay
The common stock for El Viss Company currently sells for $20 per share.The firm just paid a dividend of $1.50,and the dividend three years ago was $1.30.Dividends per share are anticipated to grow at the same rate in the future as they have over the past three years.Flotation costs for new shares will be 6% of the selling price.Calculate the following:
a.the cost of retained earnings
b.the cost of external equity capital
Correct Answer:
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a.g = 4.89% D1 = $1.50 × 1.049...View Answer
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