Southern Corporation has a capital structure of $40\%$ debt and $60\%$ common equity. This capital structure is expected not to change. The firm's tax rate is $21\%.$ The firm can issue the following securities to finance capital investments:

Debt: Capital can be raised through bank loans at a pretax cost of $8\mathrm{.}6\%.$ Also, bonds can be issued at a pretax cost of $7\mathrm{.}4\%.$

Common Stock: Retained earnings will be available for investment. In addition, new common stock can be issued at the market price of $$81.$ Flotation costs will be $$4$ per share. The recent common stock dividend was $$3\mathrm{.}04.$ Dividends are expected to grow at $7\%$ in the future.

What is the cost of external equity?