Question: A firm needs to issue some stocks for a project. It just paid a dividend of $3 per share, and the next dividend will

A firm needs to issue some stocks for a project. It just paid a dividend of $3 per share, and the next dividend will be paid in exactly one year. Its dividend is expected to grow at 5% forever, and current stock is trading at $50 per share. Suppose the flotation cost is 1%, what is the cost of new equity?

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