What would be the cost of equity from new stock

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Javits and Son’s common stock currently trades at $30.00 a share. It is expected to pay an annual dividend of $3.00 per share at the end of the year (D1= $3.00), and the constant growth is 5% 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 10% flotation costs. What would be the cost of equity from new stock?

Reference no: EM131022934

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