Cost of new equity-banyan co

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Banyan Co.'s common stock currently sells for $41.25 per share.0

The growth rate is a constant 8%, and the company has an expected dividend yield of 3%. The expected long-run dividend payout ratio is 20%, and the expected return on equity (ROE) is 10.0%. 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? Do not round intermediate calculations. Round your answer to two decimal places.

Reference no: EM132501174

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