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What is the component cost of new common equity

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Maple Ltd. has 1 million common shares outstanding. The beta on these common shares is 1.25, and they are trading at a price of $20 per share. Maple paid a dividend of $1.75 per share last year. Analysts anticipate that these dividends will  grow at an average annual rate of 2% for the foreseeable future. What is the component cost of new common equity if Maple's tax rate is 35% and flotation costs on new common equity are 6% before tax?

Reference no: EM132653115

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