Cost of common stock equity Ross Textiles wishes to measure its cost of common stock equity. The firm's stock is currently selling for $67.13. The firm just recently paid a dividend of $4.08. The firm has been increasing dividends regularly. Five years ago, the dividend was just $2.96. After underpricing and flotation costs, the firm expects to net $62.43 per share on a new issue. a. Determine average annual dividend growth rate over the past 5 years. Using that growth rate, what dividend would you expect the company to pay next year? b. Determine the net proceeds, Nn, that the firm will actually receive. c. Using the constant-growth valuation model, determine the required return on the company's stock, rs, which should equal the cost of retained earnings, rp. d. Using the constant-growth valuation model, determine the cost of new common stock, rn Weighted average cost of capital Personal Finance Problem John Dough has just been awarded his degree in business. He has three education loans outstanding. They all mature in 5 years and he can repay them without penalty any time before maturity. The amounts owed on each loan and the annual interest rate associated with each loan are given in the following table: John can also combine the total of his three debts (that is, $64,000) and create a consolidated loan from his bank. His bank will charge an annual interest rate of 5.7% for a period of 5 years. Should John do nothing (leave the three individual loans as is) or create a consolidated loan (the $64,000 question)? The weighted average annual interest rate on John's current loan portfolio is (%. (Round to two decimal places.) Loan Balance due Annual interest rate 1 2 $27,000 $12,000 $25,000 7.1% 10.1% 6.1% 3