Essay
Toombes,Inc.is issuing new common stock at a market price of $55.Dividends last year were $3.30 per share and are expected to grow at a rate of 6%.Flotation costs will be 5% of the market price.What is Toombes' cost of retained earnings,and new equity,respectively?
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D1 = $3.30 × 1.06 = $3.50
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Correct Answer:
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Cost...
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