A company has a capital structure of 50% equity and 50% debt. It just paid out a dividend of $2.28 per share, and the company has $2 million of retained earnings. The dividends are expected to grow at 4.7% per year in perpetuity. Shares are currently 26.4, and the underwriter will charge the issuing expense of 4.4% on the existing share market value. The tax rate is 40.2%.

What is the cost of retained earnings?