Famas’ common stock currently trades at RM40.00 per share. It is expected to pay an annual dividend of RM2.50 per share

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answerhappygod
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Famas’ common stock currently trades at RM40.00 per share. It is expected to pay an annual dividend of RM2.50 per share

Post by answerhappygod »

Famas’ common stock currently trades at RM40.00 per share. It is
expected to pay an annual dividend of RM2.50 per share at the end
of the year (D1 = RM2.50) and the constant growth
rate is 6% per year.
Required:
(5
Marks)
What would be the cost of equity if they issued a new stock
which would incur an 8% flotation cost?
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