Bonds: Builtrite is planning on offering a $$1000$ par value, $20$ year, $8\%$ coupon bond with an expected selling price of $$1025.$ Flotation costs would be $$55$ per bond.

Preferred Stock: Builtrite could sell a $$46$ par value preferred with an $8\%$ coupon for $$38$ a share. Flotation costs would be $$6$ a share.

Common stock: Currently, the stock is selling for $$62$ a share and has paid a $$4\mathrm{.}82$ dividend. Dividends are expected to continue growing at $13\%.$ Flotation costs would be $$3\mathrm{.}75$ a share and Builtrite has $$350,000$ in available retained earnings.

Assume a $35\%$ tax bracket.

Their after$-$tax cost of internal common $($retained earnings$)$ is:

$22\mathrm{.}51\%$

$21\mathrm{.}78\%$

$21\mathrm{.}34\%$

$21\mathrm{.}05\%$