Cute Camel Woodcraft Company is considering a one-year project that requires an initial investment of $400,000; however, in raising this capital, Cute Camel will incur an additional flotation cost of 6%. At the end of the year, the project is expected to produce a cash inflow of $480,000. The rate of return that Cute Camel expects to earn on the project after its flotation costs are taken into account is .

Cute Camel has a current stock price of $33.35 and is expected to pay a dividend of $2.03 at the end of next year. The companys growth rate is expected to remain constant at 4%. If the issue's flotation costs are expected to equal 6% of the funds raised, the flotation-cost-adjusted cost of the firm's new common stock is .

Cute Camels addition to earnings for this year is expected to be $857,000. Its target capital structure consists of 40% debt, 5% preferred stock, and 55% common stock. Cute Camel Woodcraft Companys retained earnings breakpoint is (rounded to the nearest whole dollar).