Panhandle Corp. is calculating its WACC. Its semiannual bonds have a maturity of twenty-two years and a coupon rate of 9.5%. The preferred stock has a par value of $7 and pays a dividend of $14.25. The common stock has a current dividend of $1.75. The firm is growing at 6%. Flotation costs are 7% on bonds, 10% on preferred stock and 12% on common stock. The bonds are currently selling for $1075 while the preferred stock is selling for $105 and the common stock for $18. The tax rate is 35%. What is the difference between the cost of external and internal equity? external is 6% larger external is 1.4% larger internal is 6% larger internal is 1.4% larger