The cost of new common stock

A firm needs to take flotation costs into account when it is raising capital from ------------------------? [a. Issuing new common stock OR b. retained earnings]

Alpha Moose Transporters has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $1.36 at the end of next year. The companys earnings and dividends growth rate are expected to grow at the constant rate of 9.40% into the foreseeable future. If Alpha Moose expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be?

a. 15.49%

b. 12.65%

c. 15.81%

d. 13.44%