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Trahan Lumber Company hired you to help estimate its cost of capital. You obtained the following data: D1 = $1; P0 = $27.50; g =

Trahan Lumber Company hired you to help estimate its cost of capital. You obtained the following data: D1 = $1; P0 = $27.50; g = 5% (constant); and the flotation cost is 6% of the proceeds (i.e., F = 6%). What is the cost of equity raised by selling new common stock?

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