COST OF COMMON EQUITY WITH AND WITHOUT FLOTATION

The Evanec Company's next expected dividend, D1, is $2.65; its growth rate is 6%; and its common stock now sells for $32. New stock (external equity) can be sold to net $28.80 per share.

1. What is Evanec's cost of retained earnings, rs? Round your answer to two decimal places. Do not round your intermediate calculations.
2. rs=%

1. What is Evanec's percentage flotation cost, F? Round your answer to two decimal places.
2. F =%

1. What is Evanec's cost of new common stock, re? Round your answer to two decimal places. Do not round your intermediate calculations.
2. re=%