Mobil Appliance Company's common stock is currently traded at $19.39 per share. Mobil's last cash...
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Mobil Appliance Company's common stock is currently traded at $19.39 per share. Mobil's last cash dividend was $1.00. Suppose that Mobil wants to raise capital to finance a new project by issuing new common stock. With the new project, the cash dividend is expected to be $1.10 at the end of the current year, and its growth rate is 10%. As noted above the stock now sells for $19.39 per share, but new common stock can be sold to net Mobil $16.24 per share. What is Mobil's flotation cost? Answer in decimal form (e.g. if flotation cost = 15.3%, enter 0.153).
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