Question: it says im doing b wrong on this problem, thought i solved it right but guess not. pls help me. eBook Problem Walk-Through Jarett &

it says im doing b wrong on this problem, thought i solved it right but guess not. pls help me.

eBook Problem Walk-Through Jarett & Sons's common stock currently trades at $27.00 a share. It is expected to pay an annual dividend of $2.00 a share at the end of the year (D1 = $2.00), and the constant growth rate is 3% a year. a. What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. 10.41 % b. If the company issued new stock, it would incur a 20% flotation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places. 12.26 %

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