Transcribed image text: Check My Work (2 remaining) eBook Problem Walk-Through Jarett & Sons's common stock currently trades at $20.00 a share. It is expected to pay an annual dividend of $2.50 a share at the end of the year (01 = $2.50), and the constant growth rate is 6% a year. a. What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round Intermediate calculations. Round your answer to two decimal places. % b. If the company issued new stock, it would incur an 8% notation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places % my WOTK Tenn eBook Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is currently selling for $113.50, but flotation costs will be 10% of the market price, so the net price will be $102.15 per share. What is the cost of the preferred stock, including flotation? Round your answer to two decimal places 9% A-Z Navigation Menu C Questions (CNOW) Check My Work (2 remaining) eBook The following table gives Foust Company's earnings per share for the last 10 years. The common stock, 6.7 million shares outstanding, is now (1/1/20) selling for $66.00 per share. The expected dividend at the end of the current year (12/31/20) is 55% of the 2019 EPS. Because investors expect past trends to continue, g may be based on the historical earnings growth rate. (Note that 9 years of growth are reflected in the 10 years of data.) Year EPS Year EPS 2010 $3.90 2015 $5.73 2011 4.21 2016 6.19 2012 4.55 2017 6.68 2013 4.91 2018 7.22 2014 5.31 2019 7.80 The current interest rate on new debt is 12%; Foust's marginal tax rate is 25% and its target capital structure is 45% debt and 55% equity. a. Calculate Fount's after-tax cost of debt. Round your answer to two decimal placed % Calcutate Fount's cost of common equity Calculate the cost of equity as is ../Pog. Do not round Intermediate calculations. Round your answer to two decimal places % b. Find Foust's WACC. Do not round Intermediate calculations. Round your answer to two decimal places 96