Business, 31.10.2019 03:31 krystalhurst97

Afirm has common stock with a market price of $100 per share and an expected dividend of $5.61 per share at the end of the coming year. a new issue of stock is expected to be sold for $98, with $2 per share representing the underpricing necessary in the competitive capital market. flotation costs are expected to total $1 per share. the dividends paid on the outstanding stock over the past five years are as follows:
yeardividend
1$ 4.00
24.28
34.58
44.90
55.24
the cost of this new issue of common stock is
a) 5.8 percent.
b) 7.7 percent.
c) 10.8 percent.
d) 12.8 percent.

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Afirm has common stock with a market price of $100 per share and an expected dividend of $5.61 per s...

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