7. The cost of new common stock A firm needs to take flotation costs into account when it is raising capital from Sunny

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7 The Cost Of New Common Stock A Firm Needs To Take Flotation Costs Into Account When It Is Raising Capital From Sunny 1 (18.11 KiB) Viewed 43 times

7. The cost of new common stock A firm needs to take flotation costs into account when it is raising capital from Sunny Day Manufacturing Company has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $1.35 at the end of next year. The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 5.20% into the foreseeable future. If Sunny Day expects to incur flotation costs of 6.50% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be