What would the cost of equity from new stock be

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Reference no: EM131933001

Newcomb Industries’ common stock currently trades at $40 a share. It is expected to pay an annual dividend of $2.40 a share at the end of the year (D1 = $2.40), and the constant growth rate is 4.2 percent a year. If the company were to issue new stock, it would incur a 7 percent flotation cost. What would the cost of equity from new stock be?

Reference no: EM131933001

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