SOLMAX Inc. has adopted the policy of reinvesting 45 % of its profits. The company is considering a new strategic investment totalling 200 million . 50% of the new investment will be financed by retained earnings and the rest will be financed by issuing new shares. The general assembly of the company decided to make a public offering for new shares by restricting the preemptive rights of the outstanding shareholders. Flotation cost per share is 0,40 . The current dividend rate is 25 % and the profitability of the assets is 20 %. It is estimated that the shares can be sold at 8 and the Face value of one share is 1 .

Compute the cost of newly issued shares and cost of the retained earnings.