What is its cost of new common equity

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Reference no: EM131078102

Claremore Candy Company (CCC) is expected to grow at a 4.9 percent rate for as long as it is in business. Currently the company's common stock is selling for $38.71 per share. The most recent dividend paid by CCC was $3.69 per share. If new common stock is issued, CCC will incure flotation costs equal to 7.3 percent.

(a) What is CCC's cost of retained earnings?

(b) what is its cost of new common equity?

Reference no: EM131078102

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