What would be the cost of equity from new common stock

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Reference no: EM13293919

Weaver Chocolate Co. expects to earn $3.50 per share during the current year, its expected dividend payout ratio is 65%, its expected constant dividend growth rate is 6.0%, and its common stock currently sells for $50.00 per share. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of equity from new common stock?

Answer

10.79%
12.73%
10.68%
9.28%
13.38%

Reference no: EM13293919

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