Determine the cost of equity from new common stock


LePage Co. expects to earn $2.50 per share during the current year, its expected dividend payout ratio is 65%, its expected constant dividend growth rate is 6.0%, and its common stock currently sells for $22.50 per share. New stock can be sold to the public at the current price, but a flotation cost of 7% would be incurred. What would be the cost of equity from new common stock?

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Finance Basics: Determine the cost of equity from new common stock
Reference No:- TGS0550327

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