Ross Textiles wishes to measure its cost of common stock equity. The firm's stock is currently selling for $48.29. The firm expects to pay a $3.32 dividend at the end of the year (2016). The dividends for the past 5 years are shown in the following table:

After underpricing and flotation costs, the firm expects to net $42.01 per share on a new issue.

(Round to two decimal places)

a.Determine the growth rate of dividends from 2011 to 2015.

b. Determine the net proceeds, Nn, that the firm will actually receive.

c. Using the constant-growth valuation model, determine the cost of retained earnings, rs.

d. Using the constant-growth valuation model, determine the cost of new common stock, rn.

Year Dividend per Share 2015 $3.02 2014 $2.73 $2.54 2013 52.13 2012 2011 $2.08