Calculate the cost of common equity financing

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Reference no: EM131454073

Last year the Black Water Inc. paid dividends $2.57. Company’s dividends are expected to grow at an annual rate of 2% forever. The company’s common stock is currently selling on the market for $64.40. The investments banker will charge flotation costs $4.90 per share. Calculate the cost of common equity financing using Gordon Model. Round the answers to two decimal places in percentage form.

Reference no: EM131454073

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