The cost of capital for retained earnings is a market driven b. calculated using the Geurts Valuation Model ( GVM). c affected by the tax rate of the firm d. subject to flotation costs. e difficult to estimate. 9 Nagel Equipment has a beta of 0.88 and an expected dividend growth rate of 4.00 % per year. The T-bill rate is 4.00%, and the T-bond rate is 5.25%. The annual return on the stock market during the past 4 years was 10.25%. Investors expect the average annual future return on the market to be 12.50%. Using the SML, what is the firm's required rate of return? 10. a 11.34% b 11.63% c 11.92% d 12.22% 12.52%