LePage Co.expects to earn $2.50 per share during the current year,its expected payout ratio is 55%,its expected constant dividend growth rate is 6.0%,and its common stock currently sells for $22.50 per share.New stock can be sold to the public at the current price,but a flotation cost of 5% would be incurred.What would be the cost of equity from new common stock?

Question

Quizplus · Accepted Answer

The Answer of LePage Co.expects to earn $2.50 per share during the current year,its expected payout ratio is 55%,its expected constant dividend growth rate is 6.0%,and its common stock currently sells for $22.50 per share.New stock can be sold to the public at the current price,but a flotation cost of 5% would be incurred.What would be the cost of equity from new common stock?

LePage CoExpects to Earn $2