If a fem plans to Issue new stock, notation costs (Investment bankers' fees) should not be ignored. There are two approaches to use to account for Matation costs. The first approach is to add the sum of rotation costs for the debt, preferred, and common stock and add them to the initial investment cost Because the investment cost is increased, the projects expected rate of return is reduced to it may not meet the firm's hurdle rate for acceptance of the project. The second approach involves adjusting the cost of common equity as follows: Cont of equity from new stock 1. + The differunce netween the Netation-adjusted com of equity and the cost or equity calculated without the flotation adjustment represents the Motation cost adjustment, Quantitative Problemi tarton Industries expects next year's annual dividend, 0, 00 $2,00 and is expects dividend to grow at a constant race - 44%. The firmy current common stock rice, is $25.00. If it needs to our new common stock, the firm will encounter a 4.2 Rotation cont. What is the flotation cout adjustment that must de anded to vis cost of retained earnings? Do not round intermediate calculations. Round your answer to two decimal places What is the cost of new common couity considering the estimate made from the the estimation methodologies? Do not round intermediate calculations. Round your answer to two decimal places