COMMON STOCK: Another option available to DWOTT is to sell common stock for $27 per share and just paid a divided of 3.79. The company expects a constant growth rate of 8%. However, the administrative or flotation costs associated with selling the stock amount to $2.70 per share.

What is the cost of capital for DWOTT if the corporation raises money by selling common stock?

Answer:

Would this work? Why or why not?