Calculate the cost of common equity financing

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Last year the Black Water Inc. paid dividends $3.26. 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 $97.11. The investments banker will charge flotation costs $2.89 per share. Calculate the cost of common equity financing using Gordon Model. Round the answers to two decimal places in percentage form.

Reference no: EM131611775

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