What is the flotation cost adjustment

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Barton industries expects next year's annual dividend to be $1.50 and it expects dividends to grow at a constant rate of 4.2 The firm's current common stock price is $20.30 If it needs to issue new common stock the firm will encounter a 5.3 flotation cost Assume that the cost of equity calculated without the flotation adjustment is 12 and the cost of old common equity is 11.5 What is the flotation cost adjustment that must be added to its cost of retained earnings

Reference no: EM131078053

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