QUESTION 2: St. June Inc. is a company that offers delivery service of medical instruments to customers. Recently they decided to raise $30,000,000 in order to build their new storage and distribution center. The medical depot's target capital structure calls for a debt ratio of 40%. Therefore, $18 million needs to be financed from equity, with 8,000,000 from Retained earnings, $6,000,000 from New Common Stock and $4,000,000 from Preferred Stock. The following details the financial data for both the common stock and preferred stock options: Common Stock Preferred Stock Market Price $115 $135 Annual Cash Dividend $12 (EOY 1) $20 Annual Cash Dividend Growth Rate 8% Issue Price $100 $110 Flotation Costs 16% 10% (Market Price a. Using the following 4 steps, calculate the cost of equity required to finance this new venture: 1. Cost of retained earnings (4 points] 2. Flotation costs for common stock [4 points) 3. Flotation costs for preferred stock [4 points) 4. Cost of Equity [4 points]