Cost of common equity-what would be cost of new equity

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Reference no: EM131544136

Cost of Common Equity with Flotation Banyan Co.'s common stock currently sells for $51.00 per share. The growth rate is a constant 10.8%, and the company has an expected dividend yield of 4%. The expected long-run dividend payout ratio is 40%, and the expected return on equity (ROE) is 18%. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of new equity? Do not round your intermediate calculations. %

Reference no: EM131544136

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