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