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Question 15 10 pts A firm wishes to issue new shares of its stock, which already trades in the market. The current stock
Posted: Sun May 29, 2022 5:55 pm
by answerhappygod
- Question 15 10 Pts A Firm Wishes To Issue New Shares Of Its Stock Which Already Trades In The Market The Current Stock 1 (47.48 KiB) Viewed 15 times
Question 15 10 pts A firm wishes to issue new shares of its stock, which already trades in the market. The current stock price is $26, the most recent dividend was $3 per share, and the dividend is expected to grow at a rate of 7% forever. Flotation costs for this issue are expected to be 10%. What is the required rate of return (or financing cost) in this new issue? Note: when flotation costs are given as a percentage instead of in dollar terms, the denominator in the formula changes from (P-F) to P*(1-F). Enter your answer as a percentage, rounded to two decimals. So, if your answer is 0.123456, enter 12.34.