Assume brown-murphies faces a flotation cost of 14 percent


Suppose that Brown-Murphies' common shares sell for $24.00 per share, that the firm is expected to set their next annual dividend at $0.75 per share, and that all future dividends are expected to grow by 5 percent per year, indefinitely. Assume Brown-Murphies faces a flotation cost of 14 percent on new equity issues.

What will be the flotation-adjusted cost of equity?

 

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Finance Basics: Assume brown-murphies faces a flotation cost of 14 percent
Reference No:- TGS0602015

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