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Metro Wealth Limited plans to invest in a new project in West Borneo. Currently, it has 1 million common shares outstanding, selling at RM11.25 per
Metro Wealth Limited plans to invest in a new project in West Borneo. Currently, it has 1 million common shares outstanding, selling at RM11.25 per share. Next year, the dividend is expected to be RM1 per share and is estimated to grow at 5% annually. Floatation costs for new common shares would be RM0.10 per share. Nevertheless, the company has decided not to issue any new common shares as it has sufficient cash in hand for the equity financing. Determine the cost of equity.
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