Question 3 Cost of external equity (selling common stock) is greater than the cost of internal equity (retained earnings) because: O of a high dividend payment. of the flotation costs. O of the high inflation rate. O of a high nominal interest rate. O None of the above. Question 4 Eau Claire Financial's common stock has a beta of 1.20. If the current risk-free rate is 3% and the expected return on the stock market is 15%, determine the cost of equity capital for the firm using the Capital Assets Pricing Model (CAPM). 18.9% 14.4% 21.0% O 15.8% 10 pts None of the above. 10 pts