Jarett & Sons's common stock currently trades at $39.00 a share. It is expected to pay an annual dividend of $2.25 a sha

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Jarett Sons S Common Stock Currently Trades At 39 00 A Share It Is Expected To Pay An Annual Dividend Of 2 25 A Sha 1 (39.45 KiB) Viewed 19 times

Jarett & Sons's common stock currently trades at $39.00 a share. It is expected to pay an annual dividend of $2.25 a share at the end of the year (D₁ = $2.25), and the constant growth rate is 4% 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 10% flotation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places. %