Flotation Cost
Suppose that Brown-Murphies’ common shares sell for $21.00 per share, that the firm is expected to set their next annual dividend at $0.63 per share, and that all future dividends are expected to grow by 4 percent per year, indefinitely. Assume Brown-Murphies faces a flotation cost of 14 percent on new equity issues.
What will be the flotation-adjusted cost of equity? (Round your answer to 2 decimal places.)
Cost of equity %