New equity in the capital structure, Business Management

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New equity in the capital structure

Assignment:

1. If the company issues new common stock, it will sell for $50 per share with a floatation cost of $9 per share. The last dividend paid was $3.80 and this dividend is expected to grow at a rate of 7% for the foreseeable future. What is the cost of new equity to the firm? What are the advantages and disadvantages of issuing new equity in the capital structure?

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Business Management: New equity in the capital structure

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Business Management: New equity in the capital structure

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