New stock can be sold to the public at the current price


Banyan Co.’s common stock currently sells for $48.00 per share. The growth rate is a constant 7.2%, and the company has an expected dividend yield of 6%. The expected long-run dividend payout ratio is 40%, and the expected return on equity (ROE) is 12%. 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: New stock can be sold to the public at the current price
Reference No:- TGS02726620

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