Last year the Black Water Inc. paid dividends $3. Company's dividends are expected to grow at an annual rate of 2% forever.

Last year the Black Water Inc. paid dividends $3.07. Company’s dividends are expected to grow at an annual rate of 2% forever. The company’s common stock is currently selling on the market for $78.14. The investments banker will charge flotation costs $3.91 per share. Calculate the cost of common equity financing using Gordon Model.