Jumble will issue new common stock to finance an expansion. The existing common stock just paid a $1.50 dividend, and dividends are expected to grow at a constant rate 8% indefinitely. The stock sells for $45, and flotation expenses of $2.25 will be incurred on new shares. What is the cost of new common stock be for Jumble Corp.

Match each event to its effect on the equilibrium interest rate and the amount of investment in the loanable funds market. higher interest rate, greater investment higher interest rate, less investment lower interest rate, less investment lower interest rate, greater investment immediate consumer gratification is no longer preferred by people. an efficient new source of energy effectively increases the return on owning a factory. a wave of retirees stops working and begins drawing on retirement savings.