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Calculate the cost of common equity financing

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Reference no: EM132557802

Question 1: Last year the Black Water Inc. paid dividends $2.72. Company's dividends are expected to grow at an annual rate of 5% forever. The company's common stock is currently selling on the market for $96.34. The investments banker will charge flotation costs $4.88 per share. Calculate the cost of common equity financing using Gordon Model. Round the answers to two decimal places in percentage form.

Reference no: EM132557802

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