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Cost of common stock equity?? Assume that today is January? 1, 2013. Ross Textiles wishes...

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Finance

Cost of common stock equity??

Assume that today is January? 1, 2013. Ross Textiles wishes to measure its cost of common stock equity. The? firm's stock is currently selling for ?$55.69. The firm expects to pay a ?$1.67 dividend at the end of the year? (2013). The growth rate of the dividends is 7.46?%. After underpricing and flotation? costs, the firm expects to net ?$49.56 per share on a new issue.

a.??Using the? constant-growth valuation? model, determine the cost of retained? earnings, r Subscript s.

b.??Using the? constant-growth valuation? model, determine the cost of new common? stock, r Subscript n

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