Cost of common equity with flotation Ballack Co.’s common stock currently sells for $46.75 per share. The growth rate is a constant 12 percent, and the company has an expected dividend yield of 5...

Cost of common equity with flotation Ballack Co.’s common stock currently sells for

$46.75 per share. The growth rate is a constant 12 percent, and the company has an

expected dividend yield of 5 percent. The expected long-run dividend payout ratio is 25

percent, and the expected return on equity (ROE) is 16 percent. New stock can be sold

to the public at the current price, but a flotation cost of 5 percent would be incurred.

What would the cost of new equity be?