The risk-free rate of return is 2.6% and the expected return on the market portfolio is 10.5%. Oklahoma Oilco has a beta of 1.54 and a standard deviation of returns of 16.4%. Oilco's marginal tax rate is 32%. Analysts expect Oilco's net income to grow by 8% per year in the foreseeable future. Flotation costs of issuing new common stock are 2.3%. Using the capital asset pricing model, what is Oklahoma Oilco's cost of retained earnings, in %? Drop the % symbol. E.g., if your answer is 10.23%, record it as 10.23. Blank 1. Calculate the answer by read surrounding text.