After intense discussions with ABC, a European private equity shop, your company agrees to issue equity under the following terms.

In Year 0, you will sell equity at EUR 60 per share. You will pay dividends of EUR 3 in Year 1 and EUR 12 in Year 2. In Year 3, you expect to repurchase your equity from ABC at EUR 72 per share.

You expect the following exchange rates:

Spot Year 1 Year 2 Year 3 Exchange rate (USD per EUR) 1.20 1.25 1.30 1.40

Your cost of equity in EUR terms is closest to