Namrog Consulting is seeking to estimate its WACC. As part of the process, youve been tasked to estimate the cost of preferred equity.

Namrogs preferred stock currently sells for a market price of $21.74 per share. The stock pays annual dividends. Its next dividend is expected to be $1.76 per share. Thereafter, dividends are expected to be constant each year forever.

Youve also estimated the beta of Namrog preferred stock to be 0.74. The current risk free rate is 2.3% per year and the expected return on the broad stock market is 9.9%.

Determine the most precise estimate of the cost of preferred equity.

Enter your answer as a PERCENT, not as a decimal, with at least 4 digits of precision.