Jared, the CFO of Stavinoha Industries, is planning next year's capital budget. It is at its optimal capital structure, which is 20 percent debt and 80 percent common equity, and the company's earnings and dividends are growing at a constant rate of 8 percent. The last dividend, Do, was $0.80, and the company's stock currently sells at a price of $31 per share. The firm can raise debt at an 9 percent before-tax cost, and is projecting net income to be $1,500,000 with a retention rate of 75 percent. If the form Issues new common stock, a 7 percent flotation cost will be incurred. The firm's marginal tax rate is 25 percent. What is the cost of retained earnings? a. 10.55 percent b. 11.73 percent c. 10.79 percent O d. 9.15 percent e. 11.98 percent