Cost of common equity with and without flotation

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Reference no: EM13731366

Cost of Common Equity with and without Flotation

The Evanec Company's next expected dividend, D1, is $3.15; its growth rate is 4%; and its common stock now sells for $30. New stock (external equity) can be sold to net $28.50 per share.

a. What is Evanec's cost of retained earnings, rs? Round your answer to two decimal places.

rs = %

b. What is Evanec's percentage flotation cost, F? Round your answer to two decimal places.

F = %

c. What is Evanec's cost of new common stock, re? Round your answer to two decimal places.

re = %

Reference no: EM13731366

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