What will be the floatation-adjusted cost of equity

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Reference no: EM132004518

Suppose that Brown-Murphies' common shares sell for $18.00 per share, that the firm is expected to set their next annual dividend at $0.45 per share, and that all future dividends are expected to grow by 6 percent per year, indefinitely.

Assume Brown-Murphies faces a floatation cost of 15 percent on new equity issues.

What will be the floatation-adjusted cost of equity? (Round answer to 2 decimal places).

Reference no: EM132004518

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