a) A firms preferred shares were issued last year at $62 per share. They currently trade at $72 per share and pay annual preferred dividends of $4.25 per share. How much is the companys cost of preferred shares? Please show your work.

b) The common shares of the Pop chain are currently trading at $72. Management has indicated that they expect to pay a $3 per share common dividend in one years time. It is also expected that the dividend will grow at a rate of 4.25% each year in perpetuity. Using the constant growth DDM, what is the companys cost of common equity? Please show your work.