Lincoln Co. 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 8.5%.Also, bonds can be issued at a pretax cost of 10%.

Common Stock: Retained earnings will be available for investment.In addition, new common stock can be issued at the market price of $59.Flotation costs will be $3 per share.The recent common stock dividend was $3.15.Dividends are expected to grow at 7% in the future.

what is the cost of common stock?