Banyan corsquos common stock currently sells for 4175 per, Ask an Expert

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Banyan Co.’s common stock currently sells for $41.75 per share. The growth rate is a constant 8.4%, and the company has an expected dividend yield of 5%. The expected long-run dividend payout ratio is 40%, and the expected return on equity (ROE) is 14%. New stock can be sold to the public at the current price, but a flotation cost of 10% would be incurred. What would be the cost of new equity?

Round your answer to two decimal places. Do not round your intermediate calculations.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92745952

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