Please answer both questions thank you!

Question 1

Next year, stockholders will benefit from a 7% increase over the current dividend of $4.86, and every indication points to continued growth at this same pace. This stock is currently trading at $42 per share. Given that it costs $2.88 per share to issue new common stock, what is the cost of new common equity capital?

19.42%

20.29%

12.38%

12.42%

Question 2

Company Z does not anticipate increasing dividends for the foreseeable future. If the company's most recent dividend payment was $3.25 a share and the most recent stock price was $40 a share, what is the cost of common equity for Company Z?

		8.125%
		10.25%
		12.525%
		14.50%