Frazier Enterprises has a cost of new equity of 12.5%. They paid a dividend last year of $3 and expect dividends to grow at a constant rate of 5%. Their stock is selling for $50 per share. Calculate the flotation cost associated with issuing new equity.

Question

Quizplus · Accepted Answer

The Answer of Frazier Enterprises has a cost of new equity of 12.5%. They paid a dividend last year of $3 and expect dividends to grow at a constant rate of 5%. Their stock is selling for $50 per share. Calculate the flotation cost associated with issuing new equity.

Frazier Enterprises Has a Cost of New Equity of 12