Jackson Corp S Common Stock Currently Trades At 47 21 A Share It Is Expected To

Jackson Corp.’s common stock currently trades at $47.21 a share. It is expected to pay an annual dividend of $2.25 a share at the end of year (D1= $2.25), and the constant growth rate is 7.5% a year. a. What is the company’s cost of common equity if all of its equity comes from retained earnings? b. If the company issued new stock, it would incur a 8.5% floatation cost. What would be the cost of equity from new stock? c. What is the floatation cost adjustment? 

 

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