Juliet Company paid a dividend yesterday of $3.50 per share. The dividend is expected to grow at a constant rate of 10% per year. The price of Juliet's common stock today is $40 per share. If Juliet decides to issue new common stock, flotation costs will equal $4.00 per share. Juliet's marginal tax rate is 35%. Based on the above information, the cost of retained earnings is % 17.55 20.09 19.63 26.41