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Banyan Co.’s common stock currently sells for $58.25 per share. The growth rate is a constant...

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Finance

Banyan Co.’s common stock currently sells for $58.25 per share.The growth rate is a constant 8%, and the company has an expecteddividend yield of 2%. The expected long-run dividend payout ratiois 20%, and the expected return on equity (ROE) is 10.0%. New stockcan be sold to the public at the current price, but a flotationcost of 5% would be incurred. What would be the cost of new equity?Do not round intermediate calculations. Round your answer to twodecimal places.

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