Builtrites common stock is currently selling for $77 a share and the firm just paid an annual dividend of $2.90 per share. Management believes that dividends and earnings should grow at 8% annually. Based on this, and a marginal tax rate of 34%, what is the cost of common stock (also known as the cost of retained earnings)?

Group of answer choices

8.05%

12.20%

12.07%

11.77%