A firm’s expected dividend at the year-end is Rs 3.50. Growth rate in dividend is 6%. The share sells at Rs 35. The price of each new share net of floatation cost is Rs 32. (a) Find out the cost of...

A firm’s expected dividend at the year-end is Rs 3.50. Growth rate in dividend is 6%. The share sells at Rs 35. The price of each new share net of floatation cost is Rs 32.

(a) Find out the cost of equity shares.

(b) What is the floatation cost?