Cost of Common Equity with and without Flotation
The Evanec Company's next expected dividend, D1, is $3.15; its growth rate is 4%; and its common stock now sells for $30. New stock (external equity) can be sold to net $28.50 per share.
a. What is Evanec's cost of retained earnings, rs? Round your answer to two decimal places.
rs = %
b. What is Evanec's percentage flotation cost, F? Round your answer to two decimal places.
F = %
c. What is Evanec's cost of new common stock, re? Round your answer to two decimal places.
re = %