Problem:
Kelly Corporation will issue new common stock to finance an expansion. The existing common stock just paid a $1.50 dividend, and dividends are expected to grow at a constant rate 8% indefinitely. The stock sells for $45, and flotation expenses of 5% of the selling price will be incurred on new shares.
Required:
Question: What is the cost of new common stock be for Kelly Corp?
Note: Please show guided help with steps and answer.