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samualson samualson
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6 years ago
Phillips Enterprises Inc. is expected to pay a dividend of $2.60 next year. Dividends are expected to grow at a constant rate of 8% per year, and the stock price is currently $20.00. New stock can be sold at this price subject to flotation costs of 15%. The company's marginal tax rate is 35%. Compute the cost of internal equity (retained earnings) and the cost of external equity (new common stock), respectively.
A) 0, 21.00%
B) 8.00%, 23.29%
C) 21.00%, 23.29%
D) 23.00%, 25.48%
Textbook 
Foundations of Finance

Foundations of Finance


Edition: 9th
Authors:
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guzmanguzman
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6 years ago
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samualson Author
wrote...

6 years ago
this is exactly what I needed
bahajo
wrote...

Yesterday
Good timing, thanks!
kater28
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2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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