URGENT

Assume that ABC Corporation is planning to raise the capital by selling new stocks. The company estimates that it can sell new shares for $100 per share in the primary market. This price, however, is below the fundamental value of stocks by $5 per share. Assume that the company has to pay $3 per share to underwriters. What is the cost of equity? Assume first future dividend of $4 and perpetual growth rate of 5% for dividends.