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11-8 The Choi Company's next expected dividend, D1, is $3.18; its growth rate is 6 percent; and its stock currently sells for $36. New stock can be sold to net the firm $32.4 per share.

a. What is Choi's percentage flotation cost, F?

b. What is Choi's cost of new common stock, Re ?

1 Answer

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a. What is Choi's percentage flotation cost, F?(Answer : 10%)
b. What is Choi's cost of new common stock, Re ? ( Answer : 15.8%)
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