Green Caterpillar Garden Supplies Inc. is considering a one-year project that requires an initial investment of $550,000; however, in raising this capital, Green Caterpillar will incur an additional flotation cost of 4%. At the end of the year, the project is expected to produce a cash inflow of $825,000. The rate of return that Green Caterpillar expects to earn on the project after its flotation costs are taken into account is .

Green Caterpillar has a current stock price of $33.35 and is expected to pay a dividend of $1.36 at the end of next year. The companys growth rate is expected to remain constant at 4%. If the issue's flotation costs are expected to equal 4% of the funds raised, the flotation-cost-adjusted cost of the firm's new common stock is .

Green Caterpillars addition to earnings for this year is expected to be $745,000. Its target capital structure consists of 35% debt, 5% preferred stock, and 60% common stock. Green Caterpillar Garden Supplies Inc.s retained earnings breakpoint is (rounded to the nearest whole dollar).