**** 11.36% for b. is also incorrect

Ellington Electronics wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay dividends (01) of $1.50 per share, and the current price of its common stock is $30 per share. The expected growth rate is 6 percent. (Do not round intermediate calculations. Round the final answers to 2 decimal places.) a. Compute the cost of retained earnings (Ke). Cost of retained earnings 11.00 % b. If a $2.0 flotation cost is involved, compute the cost of new common stock (Kn). Cost of new common stock 11.35 %