Exxon-Mobil Corp. has a dividend payout ratio of 60 percent, expects earnings per share of $6 next year (EPS₁=$6), currently has a stock price of $72, an ROE of 13%, and a growth rate of 6.2%. Exxon-Mobil stock has a beta of 0.8, as computed by a leading investment service. The present risk-free rate is 3.0 percent, and the expected return on the stock market is 11.0 percent. Based on use of the CAPM approach what is Exxon-Mobil's cost of retained earnings?

11.80%

9.40%

8.00%

11.20%

14.80%