Leon Inc. has the following capital structure, which it considers to be optimal:

Debt	25%
Preferred stock	15
Common equity	60

Leons expected net income this year is $34,285.72, its established dividend payout ratio is 30%, its federal-plus-state tax rate is 25%, and investors expect future earnings and dividends to grow at a constant rate of 9%. Leon paid a dividend of $3.60 per share last year, and its stock currently sells for $54.00 per share. Leon can obtain new capital in the following ways:

1. New preferred stock with a dividend of $11.00 can be sold to the public at a price of $95.00 per share.
2. Debt can be sold at an interest rate of 12%.

Leon has the following investment opportunities that are average-risk projects:

Project	Cost at t=0	Rate of Return
A	$10,000	17.4%
B	20,000	16.0
C	10,000	14.2
D	20,000	13.2
E	10,000	12.0

Calculate the Retained earnings breakpoint. Assume that Leon does not want to issue any new common stock.