Weaver Chocolate Co

question 13

Multiple Choice

Weaver Chocolate Co.expects to earn $3.50 per share during the current year,its expected dividend payout ratio is 65%,its expected constant dividend growth rate is 6.0%,and its common stock currently sells for $32.50 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)12.70%
• B)13.37%
• C)14.04%
• D)14.74%
• E)15.48%

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