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A company plans to issue a new common stock with a par value of $1 per share. The company expects to receive $20 million in

A company plans to issue a new common stock with a par value of $1 per share. The company expects to receive $20 million in total from the stock issue, and it plans to issue 4 million new shares. The underwriter charges a commission of 5% on the total amount raised. What is the cost of capital to the company after underwriting expenses? Show all calculations and assumptions.

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