A company's common stock has a market value of exist44.89 per share and its last dividend was exist3.75 per share. The stock's beta is 1.07 and the risk-free interest rate is 4.4% per year. The company's dividends are expected to grow forever at a constant rate of 5.8% per year and the tax rate is 38%. If the flotation costs for common stock are 8%, what is the company's annual cost of external equity financing? 1) 16.7% 2) 15.4% 3) 15.8% 4) 14.9% 5) 16.2%