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The companys common stock is currently selling on the

Finance: Cost of equity financing

Question

Last year the Black Water Inc. paid dividends $2.31. 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 $62.56. The investments banker will charge flotation costs $3.94 per share. Calculate the cost of common equity financing using Gordon Model.

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