Teltech stock paid a dividend yesterday of $3 per share. The dividend is expected to grow at a constant rate of 5% per year. The price of Teltechs common stock today is $40 per share. If Teltech decides to issue new common stock, flotation costs will equal 4% of the market price. Teltech's marginal tax rate is 21%. Based on the above information, the cost of equity is

13.20%.
		10.41%.
		12.50%.
		9%.