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eBook Banyan Co . ' s common stock currently sells for $ 4 2 . 2 5 per share. The growth rate is a constant

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Banyan Co.'s common stock currently sells for $42.25 per share. The growth rate is a constant 6%, and the company has an expected dividend yield of 5%. The expected long-run dividend payout ratio is 20%, and the expected return on equity (ROE) is 7.5%. 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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