The cost of equity from new common stock

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Trahern Baking Co. common stock sells for $33.45 per share. It expects to earn $3.00 per share during the current year, its expected dividend payout ratio is 60%, and its expected constant dividend growth rate is 6.0%. New stock can be sold to the public at the current price, but a flotation cost of 4.5% would be incurred. What would be the cost of equity from new common stock? 19.57% 21.08% 21.70% 15.78% 14.05%.

Reference no: EM132005870

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