Midwest Services Inc. expects to pay shareholders $7.20 per share next period. The firm will pay 50% of earnings as dividends going forward, and the firms return on equity (ROE) will remain stable at 10%. The current stock price is $200. What is the estimated cost of equity capital?

Group of answer choices

5.8%

None of the above/Other

8.6%

9.0%

5.5%