Anspagh Automobiles just paid a common dividend of $2.50 at the end of last year, and that dividend is expected to grow at an annual rate of 10%. Their common stock currently sells for $101.85, which is what they expect to get for newly issued shares at this time. Flotation costs on newly issued shares are 5% of the stock price. What is Anspagh's component cost of new equity?

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The Answer of Anspagh Automobiles just paid a common dividend of $2.50 at the end of last year, and that dividend is expected to grow at an annual rate of 10%. Their common stock currently sells for $101.85, which is what they expect to get for newly issued shares at this time. Flotation costs on newly issued shares are 5% of the stock price. What is Anspagh's component cost of new equity?

Anspagh Automobiles Just Paid a Common Dividend of $2