The KLM Ltd$.$ next expected dividend, $D_1,$ is $$3\mathrm{.}50$; its growth rate is $8\%,$ and the stock

now sells for $$40.$ New stock $($external equity$)$ can be sold to net the firm $$35\mathrm{.}80$ per

share.

a$.$ What is KLM$\text{'}$s cost of retained earnings, $k_s?$

b$.$ What is KLM$\text{'}$s percentage flotation cost, F$?$

c$.$ What is KLM$\text{'}$s cost of new common stock, $k_e$