Dog Corporation's target capital structure consists of $40\%$ debt and $50\%$ common equity. Assume that the firm has no retained earnings to fund it$$s capital budget in the coming year. Whelton just paid an annual dividend of $$1\mathrm{.}35,$ which is expected to grow at a constant rate of $5\%$; and their current stock price is $$20.$ Whelton can raise all the debt financing it needs at $8\mathrm{.}75\%.$ If dog issues new common stock, a $14\%$ flotation cost will be incurred. The firm's tax rate is $25\%.$

What is the component cost of the equity raised by selling new common stock?

What is Whelton$$s cost of capital assuming they will have to issue new common stock?