The risk free rate of return is 4% and the expected return on the market portfolio is 16%. Starship Enterprises has a beta of 2.0 and a standard deviation of returns of 26%. Starship's marginal tax rate is 35%. Analysts expect Starship's net income to grow by 12% per year for the next 5 years. Using the capital asset pricing model, what is Starship's cost of retained earnings?