Cost of Common Equity with Flotation

Cost of Common Equity with Flotation

Ballack Co.’s common stock currently sells for $51.00 per share. The growth rate is a constant
8.4%, and the company has an expected dividend yield of 3%. The expected long-run dividend payout ratio is 40%, and the expected return on equity (ROE) is 14%.
New stock can be sold to the public at the current price, but a flotation cost of 10% would be incurred. What would be the cost of new equity? Round your
answer to two decimal places.

%

Is this the question you were looking for? If so, place your order here to get started!