Sarah LTD maintains a capital structure with 40% common equity. Currently this equity is funded using retained earnings when retained earnings is used up they will have to issue new shares. The new shares would be issued a price of $25.00, would carry a dividend of $1 annually and grow at a rate of 5%. Issuing costs would be 4% of the price. If total common equity now is $3,000,000. What is the cost of equity for the new shares issued?