Question: The initial public offering price for the common stock of SW Refining is $23 per share, and it will pay a first-year dividend of $0.92

The initial public offering price for the common stock of SW Refining is $23 per share, and it will pay a first-year dividend of $0.92 per share. If the appreciation rate in dividends is anticipated to be 3.2% per year, determine the cost of equity capital for the stock offering.

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