Rudolph Inc.common stock paid a dividend yesterday of $5 per share. The dividend is expected to grow at a constant rate of 8% per year. The price of Rudolph's stock today is $29 per share. If the company decides to issue new common stock, flotation costs will equal $2.50 per share. Rudolph's marginal tax rate is 35%. Based on the above information, the cost of retained earnings is: