Question 1 (4 points) A stock's beta is 0.84 and the market risk premium is 5.2% per year. The company's common stock has a market value of $42.71 per share and its last dividend was $1.98 per share. The company's dividends are expected to grow forever at a constant rate of 5.5% per year and the tax rate is 31%. If the flotation costs for common stock are 6%, what is the company's annual cost of common stock financing? 1) 10.3% 2) 10.7% 3) 11.5% 4) 10.0% 5) 1 11.1%