3. The current market price of Ruby's common stock is RM32.50. The firm expects to...
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3. The current market price of Ruby's common stock is RM32.50. The firm expects to pay dividend of RM1.90, and the growth rate is projected to be 7% annually. The company is in a 40% tax bracket. Floatation costs would be 6% if new stocks were issued. What is the cost of common stock a. Without floatation b. With floatation Given the value for each source of capital: Find the: Debt Source of capital Preferred stock Common Stock a. WACC IF b. WACC EF Value (RM) 450,000 150,000 600,000
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