Lexington Corporation has a capital structure of 40% debt and 60% common equity. This capital structure is expected not to change. The firm's tax rate is 21%. The firm can issue the following securities to finance capital investments: Debt Capital can be raised through bank loans at a pretax cost of 7.6%. Also, bonds can be issued at a pretax cost of 9.7%. Common Stock Retained earnings will be available for investment. In adelition, new common stock can be issued at the market price of $80. Flotation costs will be $4 per share. The recent common stock dividend was $3.50. Dividends are expected to grow at 4% in the future. What is the firm's cost of external equity? SET YOUR CALCULATOR TO 4 DECIMAL PLACES AND ROUND TO 2 DECIMAL PLACES AT THE END. DO NOT ENTER THE X SIGN. IF YOUR ANSWER IS 7.7011%. FOR EXAMPLE, ENTER 7.70