The Evanec Company's next expected dividend, D1, is $3.53; its growth rate is 5%; and its common stock now sells for $30.00. New stock (external equity) can be sold to net $28.50 per share.

a) What is Evanec's cost of retained earnings, rs?
b) What is Evanec's percentage flotation cost, F ?
c) What is Evanec's cost of new common stock, re ?

agriculture and oil. natural resources, industry.

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"we first find value of tax in dollars.

the difference between the two prices   is: 23. 54 - 22 = 1.54

therefore the sales tax in dollars is 1.54

the tax % will be   (amount of tax / original cost price ) × 100

(1.54 / 22) × 100  → (0.07) × 100 =   7

so the tax rate is 7%

we can double check the answer.

7 % of 22   → (7/100) × 22 → 0.07 × 22 = 1.54

22 + 1.54 = 23.54"

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