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Ballack Co.?s common stock currently sells for $36...

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Question

Ballack Co.?s common stock currently sells for $36.50 per share. The growth rate is a constant 10.8%, 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 18%. New stock can be sold to the public at the current price, but a flotation cost of 15% would be incurred. What would be the cost of new equity? Round your answer to two decimal places.

 

Paper#5802 | Written in 18-Jul-2015

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