1. Barton Industries expects next year's annual dividend, D₁, to be $1.60 and it expects dividends to grow at a constant rate g_L = 4.2%. The firm's current common stock price, P₀, is $20.00. If it needs to issue new common stock, the firm will encounter a 4.8% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12.2% and the cost of old common equity is 11.9%. What is the flotation cost adjustment that must be added to its cost of retained earnings? Do not round intermediate calculations. Round your answer to two decimal places

__________%

2. What is the cost of new common equity considering the estimate made from the three estimation methodologies? Do not round intermediate calculations. Round your answer to two decimal places.

_________%

3. Barton Industries expects that its target capital structure for raising funds in the future for its capital budget will consist of 40% debt, 5% preferred stock, and 55% common equity. Note that the firm's marginal tax rate is 25%. Assume that the firm's cost of debt, r_d, is 8.5%, the firm's cost of preferred stock, r_ps, is 8% and the firm's cost of equity is 12.5% for old equity, r_s, and 13.4% for new equity, r_e. What is the firm's weighted average cost of capital (WACC₁) if it uses retained earnings as its source of common equity? Do not round intermediate calculations. Round your answer to three decimal places.

________ %

4. What is the firms weighted average cost of capital (WACC₂) if it has to issue new common stock? Do not round intermediate calculations. Round your answer to three decimal places.

________ %