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(Solved): Attempts Keep the Highest 0 / 1 . 9. Problem \( 10.13 \) (Cost of Common Equity with Flotation) Ban ...




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Keep the Highest 0 / 1 .
9. Problem \( 10.13 \) (Cost of Common Equity with Flotation)
Banyan Co,s common stock cur
Attempts Keep the Highest 0 / 1 . 9. Problem \( 10.13 \) (Cost of Common Equity with Flotation) Banyan Co,'s common stock currently selis for \( \$ 60.75 \) per share. The growth rate is a constant \( 7 \% \), and the company has an expected dividend yleid of 4\%. The expected long-run dividend payout ratio is \( 30 \% \), and the expected-retum 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 calculationa. Round your answer to two decimal places.


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Dividend yield = Expected dividend next year / Current stock price 4% = Expected dividend next year / $60.75 Expected dividend next year = 4%*$60.75 =
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