Chicago Paints Corporation has a target capital structure of 40 percent debt and 60 percent common equity. The company expects to have $600 of after-tax income during the coming year, and it plans to retain 30 percent of its earnings. The current stock price is P0 = $30, the last dividend paid was D0 = $2.00, and the dividend is expected to grow at a constant rate of 7 percent. New stock can be sold at a flotation cost of F = 25%. What will Chicago Paints marginal cost of equity capital be if it raises a total of $500 of new capital?