Garden Depot has just paid an annual dividend of $$3\mathrm{.}5$ per share. Analysts expect the firm's dividends to grow by $6\%$ forever. Its stock price is $$31\mathrm{.}05$ and its beta is $1\mathrm{.}4.$ Its bonds have a yield to maturity of $5\%,$ and the risk$-$premium of its stock over its bonds is $3\%.$

The risk$-$free rate is $4\%$ and the expected return on the market portfolio is $6\%.$

The company is in the process of issuing new common stock, with flotation costs of $11\%$ of the issue price.