Homework #6F (Cost of equity financing)

Homework #6F (Cost of equity financing)

 

Finance

 

Question 2 (1 point)

 

Last year the Black Water Inc. paid dividends $2.31. Company’s dividends are expected to grow at an annual rate of 3% forever. The company’s common stock is currently selling on the market for $62.56. The investments banker will charge flotation costs $3.94 per share. Calculate the cost of common equity financing using Gordon Model.

Round the answers to two decimal places in percentage form. (Write the percentage sign in the “units” box).

Your Answer:

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