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royal mediterranean cruise lines common stock is selling for 45.69 per share. the last dividend was...

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Finance

royal mediterranean cruise lines common stock is selling for 45.69per share. the last dividend was 1.46, and dividends are expectedto grow at a 7% annual rate. flotation costs on the new stock salesare 12% of the selling price. what is the cost of royals new commonstock

Answer & Explanation Solved by verified expert
4.2 Ratings (510 Votes)
Solution The following formula is used to calculate cost of new common stock re D1 P 1 F g re D0 1 g P 1 F g Where re Cost of external equity D1    See Answer
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royal mediterranean cruise lines common stock is selling for 45.69per share. the last dividend was 1.46, and dividends are expectedto grow at a 7% annual rate. flotation costs on the new stock salesare 12% of the selling price. what is the cost of royals new commonstock

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