A) Burnwood Tech plans to issue some $70 par preferred stock with a 5% dividend. A similar stock is selling on the market for $80. Burnwood must pay flotation costs of 7% of the issue price. What is the cost of the preferred stock? Round your answer to two decimal places.

B) Summerdahl Resort's common stock is currently trading at $32 a share. The stock is expected to pay a dividend of $1.75 a share at the end of the year (D₁ = $1.75), and the dividend is expected to grow at a constant rate of 5% a year. What is the cost of common equity? Round your answer to two decimal places.