The common stock for the Bestsold corporation sells for $56. if a new issue is...
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The common stock for the Bestsold corporation sells for $56. if a new issue is sold, the flotation costs are estimated to be 12 percent. The company pays 70 percent of its earnings in dividends, and a $4.90 dividend was recently paid. Earnings per share 6 years ago were $5.00. Earnings are expected to grow at the same annual rate in the future as during the past 6 years. The firm's marginal tax rate is 36 percent. calculate the cost of (a) internal common equity and (b) external common equity.
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