Jarett & Sons's common stock currently trades at $39.00 a share. It is expected to pay an annual dividend of $1.50 a share at the end of the year (01 = $1.50), and the constant growth rate is 3% a year. . What is the company's cost of common equity if all of its equity comes from retained earnings? Do nat round Intermediate calculations. Round your answer to two decimal places. % b. If the company issued new stock, it would incur an 8% flotation cost. What would be the cost of equity from new stock? Do not round Intermediate calculations. Round your answer to two decimal places 0.039 % oblem 10.03 (Cost of Common Equity) Question 6 of 7 Check My Work (4 remaining) eBook earson Motors has a target capital structure of 40% debt and 60% common equity, with no preferred stock. The yield to maturity on the ompany's outstanding bonds is 8%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC IS 12.60%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. %%