Suppose that Mobil wants to raise capital to finance a new project by issuing new common stock. With the new project, the cash dividend is expected to be $1.10 at the end of the current year, and its...

Suppose that Mobil wants to raise capital to finance a new project by issuing new common stock. With the new project, the cash dividend is expected to be $1.10 at the end of the current year, and its growth rate is 10%. The stock now sells for $18, but new common stock can be sold to net Mobil $15 per share.

(a) What is Mobil’s flotation cost, expressed as a percentage?

(b) What is Mobil’s cost of new common stock