The common stock for the Bestold Corporation sells for $59. If a new issue is sold, the flotation costs are estimated to be 8 percent. The company pays 60 percent of its earnings in dividends, and a $3.00 dividend was recently paid. Earnings per share 3 years ago were $3.00. Earnings are expected to grow at the same annual rate in the future as during the past 3 years. The firms marginal tax rate is 33 percent.

Calculate the cost of

a) internal common equity

b)external common equity