a, Summerdahl Resort's common stock is currently trading at $25 a share. The stock is expected to pay a dividend of $1.00 a share at the end of the year (D₁ = $1.00), and the dividend is expected to grow at a constant rate of 8% a year. What is the cost of common equity? Round your answer to two decimal places.

b, Summerdahl Resorts plans to issue some $70 par preferred stock with a 8% dividend. A similar stock is selling on the market for $80. Burnwood must pay flotation costs of 6% of the issue price. What is the cost of the preferred stock? Round your answer to two decimal places.