Explain what is the cost of new equity

Reference no: EM1344993

Surfin' Bubba Surfboard Shop is currently selling for $34.25 a share with a current dividend of $1.00. It is estimated that Surfin' Bubba will have a growth rate in earnings of 10% into the foreseeable future. If Surfin' Bubba plans to raise new capital for expansion, explain what is the cost of new equity if flotation costs are 8% of the price.

Reference no: EM1344993

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