Expected dividend payout ratio-constant dividend growth rate

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Reference no: EM13950203

Weaver Chocolate Co. expects to earn $2.75 per share during the current year, its expected dividend payout ratio is 60%, its expected constant dividend growth rate is 7.0%, and its common stock currently sells for $34.50 per share. 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 equity from new common stock?

Reference no: EM13950203

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