9-12 Twister Corporation is expected to pay a dividend of $7 per share one year from now on its common

9-12 Twister Corporation is expected to pay a dividend of $7 per share one year from now on its common stock, which has a current market price of $143. Twister’s Corps dividends are expected to grow at 13%.

a) Calculate the cost of the company's retained earnings.

b) If the flotation cost per share of new common stock is $4.00, calculate the cost of issuing new common stock.

Cost of Equity

Financial Management; Principles and Practice 4th ed: By Gallagher and Andrew     SOLUTION