A firm's stock is selling for $78. The next annual dividend is expected to be...
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A firm's stock is selling for $78. The next annual dividend is expected to be $2.34. The growth rate is 9%. The flotation cost is $5.00. What is the cost of retained earnings?
A. 12.82% B. 12.21% C. 12.00% D. 9.41%
There may be a change in the cost of capital because
A. the tax rate charged to investors changes.
B. the firm has exhausted its supply of retained earnings.
C. the firm is limited in the amount of amortization it can take.
D. none of the answers are correct.
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