The Recycle Company and the Largesse Company are two firms whose business risk is the same but that have different dividend policies. Recycle pays no dividend, whereas Largesse has an expected dividend yield of 6.5 percent. Suppose the capital gains tax rate is zero, whereas the income tax rate is 35 percent. Recycle has an expected earnings growth rate of 20 percent annually, and its stock price is expected to grow at this same rate. If the aftertax expected returns on the two stocks are equal (because they are in the same risk class), what is the pretax required return on Largesse’s stock?