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Calculate cost of common stock for repentance corporation

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Repentance Corporation's share of common stock is currently selling at Br. 75. The firm's projected dividend per share during the next year is Br. 3.38 and the expected dividend growth rate is 8%. Because of competitive nature of the market a Br. 3 per share underpricing is necessary. In addition, the sale of new common stock involves underwriting fee of Br. 0.60 per share and other flotation costs of Br. 0.90 per share.

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Question 1: Calculate the cost of common stock for Repentance Corporation.

Reference no: EM132572401

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