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What would be the cost of new equity

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Question - Banyan Co.'s common stock currently sells for $30.75 per share. The growth rate is a constant 5%, and the company has an expected dividend yield of 3%. The expected long-run dividend payout ratio is 50%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 15% would be incurred. What would be the cost of new equity? Do not round intermediate calculations.

Reference no: EM133073066

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