Finance Reference Question

[srattex]

I need some assistance with this question. any help would be greatly appreciated. Thanks in advance!


A manufacturing company will issue common stock to the public for $30. The expected dividend and growth in dividends are $2.25 per share and 3%, respectively. If the flotation cost is 14% of the issue's gross proceeds, what is the cost of external equity?

 

[Deleted member 4993]

I need some assistance with this question. any help would be greatly appreciated. Thanks in advance!


A manufacturing company will issue common stock to the public for $30. The expected dividend and growth in dividends are $2.25 per share and 3%, respectively. If the flotation cost is 14% of the issue's gross proceeds, what is the cost of external equity?

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[srattex]

Yes, I dont get how to start.

 

[stapel]

Yes, I dont get how to start.

Okay, let's start at the beginning: which of the terms ("stock", "issued", "dividend", etc) do you not understand?

Thank you!