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Ballack’s Co.’s common stock currently sells for$46.75 per share. The growth rate is a constant 12 percent, and thecompany has an expected dividend yield of 5 percent. The expectedlong-run dividend payout ratio is 25 percent, and the expectedreturn on equity (ROE) is 16 percent. New stock can be sold to thepublic at the current price, but a flotation cost of 5 percentwould be incurred. What would the cost of new equity be?