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An issue of common stock is selling for $57.20. The year end dividend is expected to be $2.32 assuming a constant growth rate of 6%. What is the required rate of return? A) 10.3% B) 10.1% C) 4.1% D) None of the above 2. Expected cash dividends are $2.50, the dividend yield is 6%, flotation costs are 4%, and the growth rate is 3%. Compute cost of new common stock. A) 9.00% B) 9.25% C) 9.18% D) 9.44%
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