Jarett & Sons's common stock currently trades at $26.00 a share. It is expected to pay an annual dividend of $2.00 a share at the end of the year (D₁ = $2.00), and the constant growth rate is 5% a year.

1. What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. %___________
3. If the company issued new stock, it would incur a 10% flotation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places. %________

4. Torch Industries can issue perpetual preferred stock at a price of $71.00 a share. The stock would pay a constant annual dividend of $4.50 a share. What is the company's cost of preferred stock, r_p? Round your answer to two decimal places.

   %___________