The common stock for the Bestsold Corporation sells for $59. If a new issue is sold, the flotation costs are estimated to be 8 percent. The company pays 70 percent of its earnings in dividends, and a $6.30 dividend was recently paid. Earnings per share 4 years ago were $7.00. Earnings are expected to continue to grow at the same annual rate in the future as during the past 4 years. The firm's marginal tax rate is 33 percent. Calculate the cost of (a ) internal common equity and (b ) external common equity.

a. What is the firm's cost of internal common equity?

                   __% (Round to two decimal places.)

b. What is the firm's cost of external common equity?

                   __% (Round to two decimal places.)