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Banyan Co.’s common stock currently sells for $48.50 per share. The growth rate is a constant...

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Finance

Banyan Co.’s common stock currently sells for $48.50 per share.The growth rate is a constant 9.6%, and the company has an expecteddividend yield of 5%. The expected long-run dividend payout ratiois 40%, and the expected return on equity (ROE) is 16%. New stockcan be sold to the public at the current price, but a flotationcost of 15% would be incurred. What would be the cost of newequity? Round your answer to two decimal places. Do not round yourintermediate calculations.

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