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1 0 eBook Problem Walk - Through Banyan Co . s common stock currently sells for $ 4 5 . 2 5 per share. The

10 eBook Problem Walk-Through
Banyan Co.s common stock currently sells for $45.25 per share. The growth rate is a constant 5%, and the company has an expected dividend yield of 2%. The expected long-run dividend payout ratio is 50%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 15% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your answer to two decimal places.
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