Calculate the cost of common equity financing

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Last year the Black Water Inc. paid dividends $2.65. Company's dividends are expected to grow at an annual rate of 6% forever. The company's common stock is currently selling on the market for $77.51. The investments banker will charge flotation costs $4.22 per share.

Calculate the cost of common equity financing using Gordon Model. Round the answers to two decimal places in percentage form.

Reference no: EM131968795

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