Bangor Bakery has stock with a current price of $$40.$ The firm recently paid a dividend of $$1\mathrm{.}00$ and analysts expect the dividend to grow at a rate of $8\%$ indefinitely. What is the cost of retained earnings for the firm?

Question $13$ options:

$2\mathrm{.}7\%$

$10\mathrm{.}7\%$

$7\mathrm{.}4\%$

$8\mathrm{.}5\%$

$12\mathrm{.}4\%$