Question: If the calculation is fully shown thumps up will be given In early 2018, the Alfa Corporation issued new common stock at a market price

If the calculation is fully shown thumps up will be given

In early 2018, the Alfa Corporation issued new common stock at a market price of $30. Dividends last year were $2 and expected to grow at an annual rate of 3 percent forever. Flotation costs will be 4 percent of market price. What is Alfas cost of equity for the new issue? (*You must show your calculation process as well.)

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