Ernst Electricals common stock was sold for $48.25 per share and incurred flotation cost equal to 5 percent of the issue price. The stock paid dividends of $1.25 per share yesterday and the dividends are expected to grow at a constant rate of 10 percent per year. If the firms corporate tax rate is 34 percent, what is the firms cost of external equity?

12.85 percent

13.60 percent

13.95 percent

13.00 percent

14.15 percent