What would be cost of equity from new stock

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Reference no: EM132022189

Jarett & Sons's common stock currently trades at $31.00 a share. It is expected to pay an annual dividend of $1.50 a share at the end of the year (D1 = $1.50), and the constant growth rate is 4% a year.

1.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. Do not round your intermediate calculations. %

2. If the company issued new stock, it would incur a 19% flotation cost. What would be the cost of equity from new stock? Round your answer to two decimal places. Do not round your intermediate calculations. %

Reference no: EM132022189

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