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Calculate the cost of common equity financing

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Reference no: EM132950402

Question - Last year the Black Water Inc. paid dividends $3.39. Company's dividends are expected to grow at an annual rate of 3% forever. The company's common stock is currently selling on the market for $96.52. The investments banker will charge flotation costs $4.35 per share. Calculate the cost of common equity financing using Gordon Model.

Reference no: EM132950402

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