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Cost of common stock equity Ross Textiles wishes to measure its cost of common stock equity. The firm's stock is currently selling for 57.50.Thefirmexpectstopaya57.50. The firm expects to pay a 3.40 dividend at the end of the year (2016). The dividends for the past 5 years are shown in the following table.

Year Dividend
2015 $3.10
2014 2.92
2013 2.60
2012 2.30
2011 2.12

After underpricing and flotation costs, the firm expects to net$ 52 per share on a new issue. c. Using the constant-growth valuation model, determine the cost of retained earnings, rrr_r.


Answered 11 months ago
Answered 11 months ago
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In this exercise requirement, we'll compute the cost of retained earnings using the constant-growth valuation model method.

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