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Cost of equity from new common stock

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LePage Co. expects to earn $2.20 per share during the current year, its expected payout ratio is 55%, its expected constant dividend growth rate is 4.5%, and its common stock currently sells for $26.00 per share. New stock can be sold to the public at the current price, but a flotation cost of 2.5% would be incurred. What would be the cost of equity from new common stock?

Reference no: EM132813892

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