Question $15$

$14$ pts

A firm wishes to issue new shares of its stock, which already trades in the market. The current stock price is $$41,$ the most recent dividend was $$1$ per share, and the dividend is expected to grow at a rate of $6\%$ forever. Flotation costs for this issue are expected to be $11\%.$ What is the required rate of return $($or financing cost$)$ in this new issue?

Note: when flotation costs are given as a percentage instead of in dollar terms, the denominator in the formula changes from $($P$-$F$)$ to $P^{**}(1-F).$

Enter your answer as a percentage, without the percentage sign $(\text{'}\%\text{'}),$ and rounded to two decimals. So$,$ if your answer is $0\mathrm{.}123456,$ enter $12\mathrm{.}34.$