Your company is attempting to raise $$50$ million by issuing stock certificates. One option is to issue new common stock at a market price of $$30\mathrm{.}00$ per share, with an expected dividend of $$1\mathrm{.}75$ per share for next year. Assume flotation costs are $$2\mathrm{.}00$ and the dividend is expected to grow $4\mathrm{.}00\%$ per year in the foreseeable future.

Use the dividend growth model to calculate the cost of capital for this stock issue.v