Cost of common stock equity Ross Textiles wishes to measure its cost of common stock equity. The firms stock is currently selling for $57.50. The firm expects to pay a $3.40 dividend at the end of the year (2016). The dividends for the past 5 years are shown in the following table.

Year Dividend 2015 $3.10 2014 2.92 2013 2.60 2012 2.30 2011 2.12

After underpricing and flotation costs, the firm expects to net $52 per share on a new issue. a. Determine the growth rate of dividends from 2011 to 2015. b. Determine the net proceeds, Nn, that the firm will actually receive. c. Using the constant-growth valuation model, determine the cost of retained earnings, rr. d. Using the constant-growth valuation model, determine the cost of new common stock, rn.