Skye's earnings per share last year were $2.90. The common stock sells for $50.00, last year's dividend (D0​) was $1.80, and a flotation cost of 12% would be required to sell new common stock. Security analysts are projecting that the common dividend will grow at an annual rate of 10%. Skye's preferred stock pays a dividend of $3.00 per share, and its preferred stock sells for $30.00 per share. The firm's before-tax cost of debt is 10%, and its marginal tax rate is 25%. The firm's currently outstanding 10% annual coupon rate, long-term debt sells at par value. The market risk premium is 6%, the risk-free rate is 7%, and 5kye′s beta is 1.686. The firm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1.55 million. a. Calculate the cost of each capital component, that is, the after-tax cost of debt, the cost of preferred stock, the cost of equity from retained earnings, and the cost of newly issued common stock. Use the DCF method to find the cost of common equity.