St. June Inc. is a company that offers delivery service of medical instruments to customers. Recently they decided to raise $30,000,000 in order to build their new storage and distribution center. The medical depot's target capital structure calls for a debt ratio of 40%. Therefore, $18 million needs to be financed from equity, with 8,000,000 from Retained earnings, $6,000,000 from New Common Stock and $4,000,000 from Preferred Stock. The following details the financial data for both the common stock and preferred stock options: Common Stock Preferred Stock $115 $12 (EOY 1) $135 $20 Market Price Annual Cash Dividend Annual Cash Dividend Growth Rate 8% $100 16% $110 10% (Market Price) Issue Price Flotation Costs a. Using the following 4 steps, calculate the cost of equity required to finance this new venture: 1. Cost of retained earnings [4 points] 2. Flotation costs for common stock [4 points] 3. Flotation costs for preferred stock [4 points] 4. Cost of Equity [4 points] St. June Inc. is a company that offers delivery service of medical instruments to customers. Recently they decided to raise $30,000,000 in order to build their new storage and distribution center. The medical depot's target capital structure calls for a debt ratio of 40%. Therefore, $18 million needs to be financed from equity, with 8,000,000 from Retained earnings, $6,000,000 from New Common Stock and $4,000,000 from Preferred Stock. The following details the financial data for both the common stock and preferred stock options: Common Stock Preferred Stock $115 $12 (EOY 1) $135 $20 Market Price Annual Cash Dividend Annual Cash Dividend Growth Rate 8% $100 16% $110 10% (Market Price) Issue Price Flotation Costs a. Using the following 4 steps, calculate the cost of equity required to finance this new venture: 1. Cost of retained earnings [4 points] 2. Flotation costs for common stock [4 points] 3. Flotation costs for preferred stock [4 points] 4. Cost of Equity [4 points]