Barton Industries expects next year's annual dividend,
D1, to be $2.30 and it expects dividends to grow at a
constant rate g = 4%. The firm's current common stock price,
P0, is $20.60. If it needs to issue new common stock,
the firm will encounter a 4.5% flotation cost, F. Assume that the
cost of equity calculated without the flotation adjustment is 12%
and the cost of old common equity is 11.5%. What is the flotation
cost adjustment that must be added to its cost of retained
earnings? Round your answer to 2 decimal places. Do not round
intermediate calculations.
%
What is the cost of new common equity considering the estimate
made from the three estimation methodologies? Round your answer to
2 decimal places. Do not round intermediate calculations.
%
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Barton Industries expects next year's annual dividend, D1, to be $2.30 and it expects dividends to...
Barton Industries expects next year's annual dividend, D1, to be $2.30 and it expects dividends to grow at a constant rate gL = 4.5%. The firm's current common stock price, P0, is $21.50. If it needs to issue new common stock, the firm will encounter a 5.2% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. What is the flotation cost adjustment that must...
Quantitative Problem: Barton Industries expects next year's annual dividend, D1, to be $2.00 and it expects dividends to grow at a constant rate g = 4%. The firm's current common stock price, P0, is $20.60. If it needs to issue new common stock, the firm will encounter a 5.4% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. What is the flotation cost adjustment...
Barton Industries expects next year's annual dividend, D1, to be $2.10 and it expects dividends to grow at a constant rate g = 4.5%. The firm's current common stock price, P0, is $20.30. If it needs to issue new common stock, the firm will encounter a 5.1% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. What is the flotation cost adjustment that must...
Barton Industries expects next year's annual dividend, D1, to be $1.92 and it expects dividends to grow at a constant rate gL = 4.5%. The firm's current common stock price, P0, is $24.00. If it needs to issue new common stock, the firm will encounter a 5.1% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12.5% and the cost of old common equity is 12.2%. What is the flotation cost adjustment that must...
Barton Industries expects next year's annual dividend, D1, to be $2.40 and it expects dividends to grow at a constant rate g = 4%. The firm's current common stock price, P0, is $20.00. If it needs to issue new common stock, the firm will encounter a 5.7% flotation cost, F. What is the flotation cost adjustment that must be added to its cost of retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. % What...
Barton Industries expects next year's annual dividend, D1, to be $2.20 and it expects dividends to grow at a constant rate gL = 4.5%. The firm's current common stock price, P0, is $20.30. If it needs to issue new common stock, the firm will encounter a 5.4% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. What is the flotation cost adjustment that must...
Quantitative Problem: Barton Industries expects next year's annual dividend, D1, to be $2.40 and it expects dividends to grow at a constant rate gL = 4.8%. The firm's current common stock price, P0, is $24.00. If it needs to issue new common stock, the firm will encounter a 5.6% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 14.8% and the cost of old common equity is 14.2%. What is the flotation cost adjustment...
Quantitative Problem: Barton Industries expects next year's annual dividend, D1, to be $1.70 and it expects dividends to grow at a constant rate g = 4.6%. The firm's current common stock price, P0, is $25.00. If it needs to issue new common stock, the firm will encounter a 4.8% flotation cost, F. What is the flotation cost adjustment that must be added to its cost of retained earnings? Do not round intermediate calculations. Round your answer to two decimal places....
Quantitative Problem: Barton Industries expects next year's annual dividend, D1, to be $2.10 and it expects dividends to grow at a constant rate g = 4.8%. The firm's current common stock price, Po, is $23.20. If it needs to issue new common stock, the firm will encounter a 5% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. What is the flotation cost adjustment...
Quantitative Problem: Barton Industries expects next year's annual dividend, D1, to be $2.20 and it expects dividends to grow at a constant rate gL = 4.5%. The firm's current common stock price, P0, is $20.30. If it needs to issue new common stock, the firm will encounter a 5.4% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. What is the flotation cost adjustment...