11-8 The Choi Company's next expected dividend, D1, is $3.18; its growth rate is 6 percent; and its stock currently sells for $36. New stock can be sold to net the firm $32.4 per share.

a. What is Choi's percentage flotation cost, F?(Answer : 10%)

b. What is Choi's cost of new common stock, Re ? ( Answer : 15.8%)

Question

11-8 The Choi Company's next expected dividend, D1, is $3.18; its growth rate is 6 percent; and its stock currently sells for $36. New stock can be sold  to net the firm $32.4 per share.

a. What is Choi's percentage flotation cost, F?(Answer : 10%)

b. What is Choi's cost of new common stock, Re ? ( Answer : 15.8%)

anonymous · Answer

http://www.investopedia.com/terms/g/gordongrowthmodel.asp

anonymous · Answer

Thank you I figured them out!