Eakins Inc.s common stock currently sells for $50.00 per share, the company expects to earn $2.75 per share during the current year, its expected payout ratio is 70%, and its expected constant growth rate is 6.00%. New stock can be sold to the public at the current price, but a flotation cost of 8% would be incurred. By how much would the cost of new stock exceed the cost of retained earnings? Do not round your intermediate calculations.

1. 0.44%

2. 0.20%

3. 0.40%

4. 0.23%

5. 0.33%