Jarett & Sons's common stock currently trades at $36.00 a share. It is expected to pay an annual dividend of $3.00 a share at the end of the year (D₁ = $3.00), and the constant growth rate is 8% 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 14% flotation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places. __________%