If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. There are two approaches to use to account for flotation costs. The first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the inttat investment cost. Because the investment cost is increased, the project's expected nte of return is reduced so it may not meet the firm's hurdle rate for acteptance of the project. The second approach involves adjusting the cont of common equity as follows: Cost of equity from new stock =rt=Fi(in)Di+g The difference between the flotation-adjusted cost of equily and the cost of equity calculated without the fotation adjustment represents the fotation cost adjuitment. Quantitative Probiemi Barten industries expects nent vear's annual dividend, D3, to be 52.20 and it expects dividends to grow at a constant rate 9=4.3%. The firm's current common stock price, Pb is $25.00. If it needs to iswe new common stock, the firm will enceunter a 4.1% notation cost, 5 what is the fotation cost adjustment that must be added to its cost of retained earnings? Do net rownd imermediate calculations. Round your answer to two decimat placts. 4 What is the cost of new common equity considering the estimate made from the three estimation methodologies? Do not round intermediate calculations. Round your answer to tho decimal places