A company currently pays 5 dividend on its common stock, Finance Basics

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A company currently pays 5 dividend on its common stock

Question: A company currently pays $5 dividend on its common stock. These dividends are expected to grow by 4% each year, perpetually. The current price of the company's stock is $63. The company plans on raising $75 million in capital by issuing common stock. The flotation costs are 3%.

What is the cost of common stock for the company?

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