Expert Answers

Q1. A new common stock issues that paid a $1.81 dividened last year. The firms dividends are expected to grow at 7.6% per year forever. The price of the firms common stock is now $27.07.

The price of capital from the common equity is __%   (round to two decimals)

Q2. A preferred stock paying 10.2% divdened on a $123 per par value. The prefered shares are currently selling for $153.27.

The cost of the preferred stock is ___%  (round to two decimals)