The earnings, dividends, and stock price of Natalie Inc. are expected to grow at 4% per year in the future. Natalies common stock sells for $25 per share, its last dividend was $2.25. It has a beta of 1.2, the risk-free rate is 5%, and the expected return on the market is 10%. Its bonds earn a return of 5.75%. Using the CAPM approach, what is its cost of equity?