Builtrites common stock is currently selling for $94 a share and the firm just paid an annual dividend of $3.50 per share. Management believes that dividends and earnings should grow at 7% 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 7.08% 10.72% 7.25% 10.98%