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Business, 29.10.2019 00:31 StayPuftMarshadowMan

As the winner of a contest, you are now cfo for the day for maguire inc. and your day's job involves raising capital for expansion. maguire's common stock currently sells for $45.00 per share, the company expects to earn $2.75 per share during the current year, its expected payout ratio is 70%, and its expected constant growth rate is 6.00%. new stock can be sold to the public at the current price, but a flotation cost of 8% would be incurred. by how much would the cost of new stock exceed the cost of common from reinvested earnings?

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