Consider this data: Bond coupon rate ( pre-tax): 8.60% Last year's Common Dividend: $1.60 Dividend - Preferred: 3.50 Market Price - Common $36.00 Market Price - Preferred $53.00 Most recent overall Market Return: 7% Flotation Cost per share of preferred: $8.00 Compound growth rate of common dividends: 5% Most recently published risk free rate: 2.5% Corporate Tax Rate: 35% Beta: 1.7 Calculate the Weighted after-tax Cost of Retained Earnings using the Capital Asset Pricing Model. .1015 .0290 0.0312 0.0967