A firm has ordinary shares with a current market price of $32 per share and an expected dividend of $2.55 per share at the end of the coming year. The dividends paid on the outstanding shares over the past five years are as follows: Year 1: $2.00 Year 2: $2.10 Year 3: $2.21 Year 4: $2.32 Year 5: $2.43

Future dividends are expected to grow at the same rate as the past growth in dividends. The firm expects to sell new shares for $32 minus $2 per share representing the underpricing needed to sell the shares. Also, flotation costs are expected to total $1 per share. The cost of the firm's ordinary share equity is ________.