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Retained earnings versus new common stock Using the data for a firm shown in the following table, calculate the cost of retained earnings and the cost of new common stock using the constant-growth valuation model.(Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)

Current market

price per share

Dividend

growth rate

Projected

dividend per

share next year

Underpricing

per share

Flotation cost

per share

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$30.0030.00

77%

$0.900.90

$2.002.00

$2.002.00

a. The cost of retained earnings is

nothing %.

(Round to two decimal places.)b.The cost of new common stock is

nothing %.

(Round to two decimal places.)

2-

Internal rate of returnFor the project shown in the following table,

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, calculate the internal rate of return

(IRR).

Then indicate, for the project, the maximum cost of capital that the firm could have and still find the IRR acceptable.

The project's IRR is

nothing %.

(Round to two decimal places.)The maximum cost of capital that the firm could have and still find the IRR acceptable is

nothing %.

(Round to two decimal places.)

Initial investment

(CF 0CF0)

$130 comma 000130,000

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Year

(t)

Cash inflows

(CF Subscript tCFt)

1

30,000

2

45,000

3

50,000

4

40,000

5

$10,000

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