Barton Industries expects next year's annual dividend, D1, to be $1.60 and it expects dividends to...

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Barton Industries expects next year's annual dividend, D1, to be$1.60 and it expects dividends to grow at a constant rate g = 4.8%.The firm's current common stock price, P0, is $20.90. If it needsto issue new common stock, the firm will encounter a 5.3% flotationcost, F. Assume that the cost of equity calculated without theflotation adjustment is 12% and the cost of old common equity is11.5%.
What is the flotation cost adjustment that must be added to itscost 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 estimatemade from the three estimation methodologies? Round your answer to2 decimal places. Do not round intermediate calculations. %

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Requirement a Flotation cost adjustment that must be added to its cost of retained earnings Step1 Calculation of the cost of common stock Dividend in year 1 D1 160 per See Answer

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Barton Industries expects next year's annual dividend, D1, to be$1.60 and it expects dividends to grow at a constant rate g = 4.8%.The firm's current common stock price, P0, is $20.90. If it needsto issue new common stock, the firm will encounter a 5.3% flotationcost, F. Assume that the cost of equity calculated without theflotation adjustment is 12% and the cost of old common equity is11.5%.What is the flotation cost adjustment that must be added to itscost 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 estimatemade from the three estimation methodologies? Round your answer to2 decimal places. Do not round intermediate calculations. %