1. BYDD Co. common stock sells for $32 per share. It expects to earn $4 per share during the current year, its expected dividend payout ratio is 60%, and its expected constant dividend growth rate is 6.0%. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of equity from new common stock? (Please use the formula approach to solve this problem)