Cost of common shares includes dividends paid to shareholders, flotation costs, and growth rate.

Name: Cost of common shares includes dividends paid to shareholders, flotation costs, and growth rate.
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Quizplus · Accepted Answer

The cost of common shares (equity) is typically calculated using the Dividend Discount Model (DDM), which considers dividends per share, the growth rate of these dividends, and the price of the shares, adjusting for flotation costs when new shares are issued.

Cost of Common Shares Includes Dividends Paid to Shareholders, Flotation