Common stockThe firm's common stock is currently selling for $80 per share. The stock has paid a dividend that has gradually increased for many years, rising from

$2.70 ten years ago to the $4.40 dividend payment, Upper D 0, that the company just recently made. If the company wants to issue new new common stock, it will sell them

$2.00 below the current market price to attract investors, and the company will pay $3.50 per share in flotation costs.

c.Calculate the cost of common stock (both retained earnings and new common stock).