eBook Problem Walk-Through Jarett & Sons's common stock currently trades at $21.00 a share. It is expected to pay an annual dividend of $1.50 a share at the end of the year (Du = $1.50), and the constant growth rate is 4% a year. a. What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the company issued new stock, it would incur a 12% flotation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places. % eBook The Bouchard Company's EPS was $6.80 in 2018, up from $3.34 in 2013. The company pays out 40% of its earnings as dividends, and its common stock sells for $37.00. a. Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places. b. The last dividend was Do = 0.40($6.80) = $2.72. Calculate the next expected dividend, Di, assuming that the past growth rate continues. Do not round intermediate calculations. Round your answer to the nearest cent. c. What is Bouchard's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places. %