Compute the cost of new issue of equity shares

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A company plans to issue 10000 new shares of Rs. 100 each at a par. The floatation costs are expected to be 4% of the share price. The company pays a dividend of Rs. 12 per share initially and growth in dividends is expected to be 5%. Compute the cost of new issue of equity shares. (b) If the current market price of an equity share is Rs. 120. Calculate the cost of existing equity share capital?

Reference no: EM132847509

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