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Homework answers / question archive / Cost of common stock: Whitewall Tire Co
Cost of common stock: Whitewall Tire Co. just paid a $2.00 dividend on its common shares. Whitewall is expected to increase its annual dividend by 5 percent per year into the foreseeable future. The current price of Whitewall's common shares is $15. If the floatation cost for issuing new equities is 6% of the equity price, what will be the cost of new common equity for Whitewall? Round your intermediate calculation to five decimal places and final percentage answer to two decimal places.
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