Bonds: Builtrite is planning on offering a $$1000$ par value, $20$ year, $6\%$ coupon bond with an expected selling price of $$1025.$ Flotation costs would be $$55$ per bond. Preferred Stock: Builtrite could sell a $$46$ par value preferred with a $6\%$ coupon for $$38$ a share. Flotation costs would be $$2$ a share.

Common stock: Currently, the stock is selling for $$62$ a share and has paid a $$2\mathrm{.}82$ dividend. Dividends are expected to continue growing at $11\%.$ Flotation costs would be $$3\mathrm{.}75$ a share and Builtrite has $$350,000$ in available retained earnings.

Assume a $25\%$ tax bracket.

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

$15\mathrm{.}72\%$

$16\mathrm{.}05\%$

$15\mathrm{.}51\%$

$16\mathrm{.}58\%$