Equity comes from retained earnings

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Javits & Sons' common stock currently trades at $37.00 a share. It is expected to pay an annual dividend of $2.50 a share at the end of the year (D1 = $2.50), and the constant growth rate is 8% a year. What is the company's cost of common equity if all of its equity comes from retained earnings? Round your answer to two decimal places. %

If the company were to issue new stock, it would incur a 19% flotation cost. What would the cost of equity from new stock be? Round your answer to two decimal places. %

Reference no: EM131073221

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