What is canyon’s cost of new common equity

Reference no: EM131394409

Canyon Eatery's common stock, which is currently selling for $50 per share, has a beta coefficient equal to 0.75. Canyon has paid a dividend equal to $6 per share since it has been in business, and expectations are that the same dividend will be paid forever. Canyon's investment banker charges 7 percent when new common stock is issued. What is Canyon's

(a) cost of retained earnings and

(b) cost of new common equity?

Reference no: EM131394409

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