cost of common stock equity.Ross Textiles wishes to measure its cost of common stock equity. The firm's stock is currently selling for $35.41 . The firm expects to pay a $3.25 dividend at the end of the year (2016). The dividends for the past 5 years are shown in the following table:

Year Dividend per share

2015 2.97 2014 2.65 2013 2.44 2012 2.14 2011 2.06

After underpricing and flotation costs, the firm expects to net $32.93 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, Rs.

d.Using the constant-growth valuation model, determine the cost of new common stock,Rn