Haroldson Inc common stock is selling for 22 per share. The last dividend was 1.20, and
dividends are expected to grow at a 6 annual rate. Flotation costs on new stock sales are 5 of the
selling price.
What is the cost of Haroldson's retained earnings?
A) 5.73 B) 12.09 C) 11.78 D) 11.45
Question 2
If an old asset is sold for less than its book value, the resulting loss will save the company taxes,
hence lowering the cost of the project.
Indicate whether the statement is true or false
