The P/E ratio on a stock market is 12. The underlying real earnings growth rate is 1.6%, at a constant long-run inflation rate of 2.7%. What is the firm's nominal long-run cost of capital?

Carry out calculations to at least 4 decimal places. Enter percentages as whole numbers. Example: 3.03% should be entered as 3.03. Do not include commas or dollar signs in numerical answers.