Use the information to answer the following questions.

The Global Advertising Company has a marginal tax rate of 40%.

The company can raise debt at a 8% interest rate.

The last dividend paid by Global was $1.10. Global's common stock is selling for $7.93 per share, and its expected growth rate in earnings and dividends is 4%.

Global plans to finance all capital expenditures with 30% debt and 70% equity.

What is the firm's weighted average cost of capital if the firm has sufficient retained earnings to fund the equity portion of its capital budget?

Select one:

a.13.95%

b.14.34%

c.14.61%

d.11.59%

e.15.70%

Continued from previous question. Assume that the floatation cost of new stock issuing is 1.5%. What is Global's cost of common stock if it has to issue new common stock?

Select one:

a.17.99%

b.17.78%

c.16.23%

d.19.65%

e.18.65%