What will be the flotation-adjusted cost of equity

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Reference no: EM132003119

Suppose that Brown-Murphies' common shares sell for $22.50 per share, that the firm is expected to set their next annual dividend at $0.69 per share, and that all future dividends are expected to grow by 5 percent per year, indefinitely.

Assume Brown-Murphies faces a flotation cost of 13 percent on new equity issues. What will be the flotation-adjusted cost of equity?

(Round your answer to 2 decimal places.) Cost of equity %

Reference no: EM132003119

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