1. Sentry Manu. just paid a dividend of $5 per share. The dividend is expected to grow at a constant rate of 6% per year. The price of Sentry Manu. stock today is $32 per share. If Sentry Manu. decides to issue new common stock, flotation costs will equal $2.30 per share. Sentry Manu. marginal tax rate is 35% above information, the cost of new common stock (external equity) is

   1. 23.19%

   2. 25.73%

   3. 23.85%

   4. 24.23%