Cost of common stock equityRoss Textiles wishes to measure its cost of common stock equity.The firm's stock is currently selling for $70.67.The firm just recently paid a dividend of $4.00.The firm has been increasing dividends regularly.Five years ago, the dividend was just $2.99.

After underpricing and flotation costs, the firm expects to net $69.00 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, r Subscript s, which should equal the cost of retained earnings, r r.

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

a. The average annual dividend growth rate over the past 5 years is

_______%.(Round to two decimal places.)