The cost of equity and flotation costsmessman manufacturing, Ask an Expert

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The Cost of Equity and Flotation Costs

Messman Manufacturing will issue common stock to the public for $40. The expected dividend and growth in dividends are $2.75 per share and 5%, respectively. If the flotation cost is 14% of the issue's gross proceeds, what is the cost of external equity, re? Round your answer to two decimal places.

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Financial Management, Finance

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