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P14-2 Issuing New Equity IBU is expected to grow at 4%/year. Their common stock is selling for $69.33, and their most recent dividend was $3.00

P14-2 Issuing New Equity

IBU is expected to grow at 4%/year. Their common stock is selling for $69.33, and their most recent dividend was $3.00 per share. Flotation costs are 10% and the marginal tax rate is 25%.

A. Calculate the cost of new equity.

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