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1. LePage Co. expects to earn $2.50 per share during the current year, its expected payout ratio is 55%, its expected constant dividend growth rate is 6.0%, and its common stock currently sells for $22.50 per share. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of equity from new common stock?

a. 11.81%
b. 12.43%
c. 13.05%
d. 13.71%
e. 14.39%

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What would be the cost of equity from new common stock?
1. LePage Co. expects to earn $2.50 per share during the current year, its expected payout ratio is 55%, its expected constant ...

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