The Cost of New Common Stock Equity for Tangshan Mining

question 56

True/False

The cost of new common stock equity for Tangshan Mining would be 17.60 percent if the firm just paid a dividend of $4.00, the stock price is $50.00, dividends are expected to grow at 8 percent indefinitely, and flotation costs are $5.00 per share.

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Definitions:

Directs Behavior

Directing behavior refers to the ways in which cognitive processes, environmental cues, and personal goals influence an individual's actions and decision-making.

Constructs Predict

Theoretical concepts or ideas proposed to forecast outcomes or behaviors based on certain conditions.

Fundamental Postulate

A core principle in Kelly's personal construct theory stating that a person's processes are psychologically channelized by the ways in which he anticipates events.

11 Corollaries

A set of principles associated with George Kelly's personal construct theory that explain how individuals' psychological processes are organized.