If a firm plans to issue new stock, flotation costs (imvertment bankers' fees) should not be ignored. There are two approaches to use to account for flotation costs. The first opproach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investiment cost. Beasause the investinent cost is increased, the project's expected rate of return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. The second approsch irvolvos adjusting the cost of comman equity as follows: Cost of equity from new stock =re=F0(17)D+g The difference between the flotation adjusted cost of equity and the cost of equity calculated withocit the flotation adjustment reptesents the flototkin cost adiustment. Quantitative Problem: Barton Industies expects next year's annual dividend, D1, to be $1. 50 and it expects dividends to grow at a canstant rate 9=4.6%. The firm's current comman stock price, Pe, is 520,00 . If it neceds to issue nuw cominon stock, the firm will encounter a b\% flotation cost, F. Whot is the flotation cost odjustinent that must be adised to its cost of retained enmings? Do not round intermediate calculatisans. Round your answer to two decimal ploces. What is the cost of new common equity considering the estimste made from the theen etimation methodologies? Do not round intermediate calculations. Round your ariswer to two decimat ploces