S$.$ Bouchard and Company hired you as a consultant to help

estimate its cost of capital. You have obtained the following data:

D$0=$ $$0\mathrm{.}85$; P$0=$ $$22\mathrm{.}00$; and g $=$

$6\mathrm{.}00\%($constant$).$ The CEO thinks, however, that the stock price is

temporarily depressed, and that it will soon rise to $$37\mathrm{.}00.$ Based

on the DCF approach, by how much would the cost of equity from

retained earnings change if the stock price changes as the CEO

expects? Do not round your intermediate calculations.