a) Cost of retained earnings:-
=Expected dividend/current price+growth rate
=1.7/20+4.1%
=12.60%
b) Cost of new equity:-
=Expected dividend/current price+growth rate
=1.7/(20*(1-4.7%))+4.1%
=13.02%
6 Quantitative Problem: Barton Industries expects next year's annual dividend, D1, to be $1.70 and it...
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