Calculate the cost of the newly issued stock

Assignment Help Finance Basics

Reference no: EM1357037

Roto Roofing Corp. just paid a dividend of $1.85. This dividend is expected to grow at a constant annual ratae of 3% per year. Roto Roofing's common stock is currently selling for $12.50. The firm can sell new stock at this price subject to floatation costs of 15%. What will the cost of the newly issued stock be?

a.) 17.8%

b.) 16.2%

c.) 18.5%

d.) 19.7%

e.) 20.9%

Reference no: EM1357037

Questions Cloud

Examples of modern medical experiments : Explain some of the restrictions that are placed on medical experiments and drug testing in the 21st century and evaluate the advantages and disadvantages of such restrictions

Compute the magnitude of the magnetic field at the center : The density of ice is 917 kg/m3 and the density of sea water is 1025 kg/m3. A swimming polar bear climbs onto a piece of floating ice that has a volume of 5.2m3. What is weight of the heaviest bear that the ice can support without sinking complete..

Short description of ptsd for a research paper : Can you please help me with a short description of PTSD for a research paper?

Business question-journal entries : During the current year, the Yellow Rose Company completed construction of a new assembly facility in Ocala, Florida. The facility will receive components from Yellow Rose other facilities and assemble them for shipment to distributors. The follow..

Calculate the cost of the newly issued stock : Roto Roofing Corporation just paid a dividend of $1.85. This dividend is expected to grow at a constant annual ratae of 3 percent each year. Roto Roofing's common stock is currently selling for $12.50.

How http and smtp figure into organizational security : Users are familiar with some network services like HTTP (Hypertext Transport Protocol) - the Web; and SMTP. Tell us more about these services. How do they figure into organizational security? Elaborate with specifics.

What are the risks involved when using hardball tactics : What are the risks involved when using hardball tactics and how can these risks be downplayed or ameliorated?

What is the kinetic energy of the aircraft : The electric field 5.90 from a very long charged wire is ( 2300 ,toward the wire).What is the charge (in nC) on a 1 cm-long segment of the wire.

Post-traumatic stress disorder to adult : My cousin got post-traumatic stress disorder (PTSD) as an adult. Most of it was blamed on his childhood issues that were unresolved. I think that if there are issues that are severe and they are never dealt with then they could cause PTSD.

User Account

All Pages