Part A

Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is currently selling for $86.00, but flotation costs will be 7% of the market price, so the net price will be $79.98 per share. What is the cost of the preferred stock, including flotation? Round your answer to two decimal places. ___________%

Part B

Tresnan Brothers is expected to pay a $1.60 per share dividend at the end of the year (i.e., D₁ = $1.60). The dividend is expected to grow at a constant rate of 10% a year. The required rate of return on the stock, r_s, is 13%. What is the stock's current value per share? Round your answer to two decimal places.

$ ____________