Jarett & Sons' common stock currently trades at $36.00 a share. It is expected to pay an annual dividend of $2.00 a shar

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Jarett Sons Common Stock Currently Trades At 36 00 A Share It Is Expected To Pay An Annual Dividend Of 2 00 A Shar 1 (9.32 KiB) Viewed 81 times

Jarett & Sons' common stock currently trades at $36.00 a share. It is expected to pay an annual dividend of $2.00 a share at the end of the year (D1 = $2.00), and the constant growth rate is 3% a year. a. What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the company issued new stock, it would incur a 13% flotation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places. %