The Mobil Appliance Companys earnings, dividends, and stock price are expected to grow at an annual rate of 12%. Mobils common stock is currently traded at $18 per share. Mobils last cash div- idend was $1.00, and its expected cash dividend for the end of this year is $1.12. Suppose that Mobil wants to raise capital to finance a new project by issuing new common stock. With the new project, the cash dividend is expected to be $1.10 at the end of the current year, and its growth rate is 10%. The stock now sells for $18, but new common stock can be sold to net Mobil $15 per share.

What is Mobils cost of new common stock (k_e)? Please show your work.