A firm has common stock with a market price of $100 per share and an expected dividend of $5.61 per share at the end of the coming year. The dividends are expected to grow at a constant rate of 7% per year. A new issue of stock is expected to be sold for $97 after $2 per share underpricing and $1 per share flotation costs are deducted from the market price. The cost of this new issue of common stock is: