Barton Industries expects next year's annual dividend, D1, to be $2.10 and it expects dividends to...

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Barton Industries expects next year's annual dividend, D1, to be$2.10 and it expects dividends to grow at a constant rate gL =4.9%. The firm's current common stock price, P0, is $24.20. If itneeds to issue new common stock, the firm will encounter a 5.7%flotation cost, F. Assume that the cost of equity calculatedwithout the flotation adjustment is 12% and the cost of old commonequity is 11.5%. What is the flotation cost adjustment that must beadded to its cost of retained earnings? Do not round intermediatecalculations. Round your answer to two decimal places. % What isthe cost of new common equity considering the estimate made fromthe three estimation methodologies? Do not round intermediatecalculations. Round your answer to two decimal places.

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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 210 per share Current Share See Answer

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Barton Industries expects next year's annual dividend, D1, to be$2.10 and it expects dividends to grow at a constant rate gL =4.9%. The firm's current common stock price, P0, is $24.20. If itneeds to issue new common stock, the firm will encounter a 5.7%flotation cost, F. Assume that the cost of equity calculatedwithout the flotation adjustment is 12% and the cost of old commonequity is 11.5%. What is the flotation cost adjustment that must beadded to its cost of retained earnings? Do not round intermediatecalculations. Round your answer to two decimal places. % What isthe cost of new common equity considering the estimate made fromthe three estimation methodologies? Do not round intermediatecalculations. Round your answer to two decimal places.