Retained earnings versus new common stock Using the data for a 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.

Current market price per share

Dividend growth rate

Projected dividend per share next year

Underpricing per share

Flotation cost per share

$60.00

77%

$1.80

$2.00

$2.00

a The cost of retained earnings is? (Round to two decimal places.)

b.The cost of new common stock is Round to two decimal places.)