s. Which of the following is NOT correct? a. As long as a firm does not pay out 100% of its earnings, the firm's annual profit that is retained in the business (Le, the addition to retained earnings) is another source of funds for a firm's expansion b. The maximum growth rate that a firm can achieve with no access to external capital is called the firm's sustainable growth rate. It can be calculated by using the AFN equation with AFN equal to zero and solving for g c. None of the above is correct 7. Which of the following is correct? a. Dividends are paid with cash taken from the accumulated retained earnings account, hence dividend policy does not affect the AFN forecast A negative APN indicates that retained earnings and spontaneous liabilities are far more than sufficient to finance the additional assets needed. c. All of the above are correct 8. Perpetual preferred stock from Franklin Inc. sells for $97.50 per share, and it pays an $8.50 annualdividend. The flotation cost is 4.00% of the price of the preferred stock, what is the company's cost of preferred stock for use in calcula a. 8.7296 b. 9.08% c. 9.4496 d. 9.8296 e. 10.22% 9. Adams Inc. is a company that is exactly as risky as an average firm in the market. The current market data is as follows: r-5.00% RPM-6.50%. The company is also expected to pay $1.25 of dividends next year, while the current stock price is $21. What is the firm's cost of common stock? a. 11.50% b. 11.64% C. 11.99% d. 12.35% e. 12.72%