1. Jackson Company The Jackson Company has just paid a dividend of $3.00 per share on its common stock, and it expects this dividend to grow by 10 percent per year, indefinitely. The firm has a beta of 1.50; the risk-free rate is 10 percent; and the expected return on the market is 14 percent. The firm's investment bankers believe that new issues of common stock would have a flotation cost equal to 5 percent of the current market price.

   Refer to Jackson Company. What will be Jackson's cost of new common stock if it issues new stock in the marketplace today?

   	a.	16.32%
   	b.	17.00%
   	c.	9.85%
   	d.	15.25%
   	e.	12.47%