Barton Electronics wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay dividends (D₁) of $1.70 per share, and the current price of its common stock is $34 per share. The expected growth rate is 8 percent.

(a)	Compute the cost of retained earnings (Ke). (Hint: Use appropriate formula)(Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Cost of retained earnings

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(b)	If a $2 flotation cost is involved, compute the cost of new common stock (Kn). (Hint: Use appropriate formula)(Round your intermediate and final answers to 2 decimal places. Omit the "%" sign in your response.)

Cost of new common stock

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