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Fedland Inc. will issue new common stock to finance an expansion. The existing common stock just paid a $6.80 dividend, with dividends expected to grow

Fedland Inc. will issue new common stock to finance an expansion. The existing common stock just paid a $6.80 dividend, with dividends expected to grow at a constant rate of 4% indefinitely. The stock sells for $40.00 and flotation expenses of 12% of the selling price will be incurred on new shares. What is the cost of new common?

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