P911 Retained earnings versus new common stock Using the data for each 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. Projected Current market Dividend dividend per Underpricing Flotation cost Firm price per share growth rate share next year per share per share A $50.00 8% $2.25 $2.00 $1.00 B 20.00 4 1.00 0.50 1.50 C 42.50 6 2.00 1.00 2.00 D 19.00 2 2.10 1.30 1.70