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Suppose that Brown-Murphies’ common shares sell for $17.50 per share,

/in /by

Suppose that Brown-Murphies’ common shares sell for $17.50 per share,
that the firm is expected to set their next annual dividend at $0.49 per share, and that all future dividends are expected to grow by 6 percent per year, indefinitely. Assume Brown-Murphies faces a flotation cost of 11 percent on new equity issues.

What will be the flotation-adjusted cost of equity? (Round your answer to 2 decimal places.)

Cost of equity __%

 
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