Problem $7-15$ Constant$-$Growth Model $($LO$2)$

A stock sells for $$40.$ The next dividend will be $$4$ per share. If the rate of return earned on reinvested find $10\%$

and the company reinvests a constant $40\%$ of earnings in the firm, what must be the discount rate?

Note: Do not round your intermediate calculations. Enter your answer as a whole percent.