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 fiotation costs. The first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. Because the investment cost is increased, the project's expected rate of return is reduced so it may not meet the firm's hurdie rate for acceptance of the project. The secand approach involves adjusting the cost of common. equity as follows: Cost of equity from new stock =re=P0(11D1+g The difference between the fotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the fotation cost adjustment. Quantitative Problemt Barton Industries expects next year's annsal dividend, D1, to be $1.90 and it expects dividends to grow at a constant rate 9 in 4.9%. The firm's current common stock price. Po, is $20.00. If it needs to issue new common stock, the firm will encounter a 4.1% fotation cost, F. What is the flotatian cost adjustment that must be added to its cost of retained earnings? Do not round intermediate calculations, Round your answer to two decimal places. What is the cost of new coermon equity considering the estimate made from the three estimation methodologies? Do not round intermediate calculations. Aound your answer to two decimal places