Question: 1) Sun Instruments expects to issue new stock at $34 a share with estimated flotation costs of 7 percent of the market price. The company

1) Sun Instruments expects to issue new stock at $34 a share with estimated flotation costs of 7 percent of the market price. The company currently pays a $2.00 cash dividend and has a 5 percent growth rate. What are the costs of retained earnings and new common stock? Round your answers to two decimal places.

a. Costs of retained earnings: ____ %

b. Cost of new common stock: ____ %

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