the winner of a contest, you are now CFO for the day for Maguire Incand your day's job involves raising capital for expansionMaguire's common stock currently sells for $45.00 per share, the company expects to earn $2.75 per share during the current year, its expected payout ratio is 70%, and its expected constant growth rate is 6.00% New stock can be sold to the public at the current price, but a flotation cost of 8% would be incurred By how much would the cost of new stock exceed the cost of common from retained earnings?
A) 0.09%
B) 0.19%
C) 0.37%
D) 0.56%
E) 0.84%

Question

Quizplus · Accepted Answer

The Answer of the winner of a contest, you are now CFO for the day for Maguire Incand your day's job involves raising capital for expansionMaguire's common stock currently sells for $45.00 per share, the company expects to earn $2.75 per share during the current year, its expected payout ratio is 70%, and its expected constant growth rate is 6.00% New stock can be sold to the public at the current price, but a flotation cost of 8% would be incurred By how much would the cost of new stock exceed the cost of common from retained earnings?
A) 0.09%
B) 0.19%
C) 0.37%
D) 0.56%
E) 0.84%

The Winner of a Contest, You Are Now CFO for the Day