The common stock for the Bestsold Corporation sells for

$59.

If a new issue is sold, the flotation costs are estimated to be

11

percent. The company pays

70

percent of its earnings in dividends, and a

$5.60

dividend was recently paid. Earnings per share

4

years ago were

$6.00.

Earnings are expected to continue to grow at the same annual rate in the future as during the past

4

years. The firm's marginal tax rate is

34

percent. Calculate the cost of

(a)

internal common equity and

(b)

external common equity.