Question $12$

A company is planning to pay an annual dividend of $$2\mathrm{.}26$ a share next year. The market price of the stock is $$25$ and the growth rate is $2\mathrm{.}5$ percent. What is the cost of equity in percentage terms? $($DO NOT INCLUDE THE $\%$ SYMBOL IN YOUR ANSWER; $1$ or $2$ decimal places$)$