p9-11 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 com- mon stock using the constant-growth valuation model. Projected dividend per Underpricing Firm Dividend growth rate 8% $2.25 Current market price per share $50.00 20.00 42.50 19.00 Flotation cost per share $1.00 1.50 2.00 1.70 $2.00 0.50 1.00 1.30 1.00 2.00 2.10