Cost of equity from new common stock, Financial Management

Weaver Chocolate Co. expects to gain $3.50 per share during the present year, its expected dividend payout ratio is 65%, its expected constant dividend growth rate is 6.0%, and its common stock presently sells for $32.50 per share.  New stock can be sold to the public at the present price, but a flotation cost of 5% would be incurred.  What would be the cost of retained earnings  common equity (rs) for Weaver Chocolate Co.?  What would be the cost of equity from new common stock (re)?

Posted Date: 3/26/2013 8:01:46 AM | Location : United States







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