Taylor Industries, on Shirly Street has had many issues. As a long running company, the company the cost of retained earning percentage of 10% for many, many years.. Management has decided to revisit this decision based on recent changes in financial markets. An average stock is currently earning 8%, treasury bills yield 3.5%, and shares of The companys stock are selling for $29.44. The firm just paid a dividend of $1.50, and anticipates growing at 5% for the foreseeable future. Taylor Industrys CFO recently asked an investment banker about issuing bonds and was told the market was demanding a 6.5% coupon rate on similar issues. Taylors stock has a beta of 1.4. Recommend a cost of retained earnings for Taylors.