The stock of Geo Company sells for $42.50, most recent dividend was $1.25. A flotation cost of 10% would be required to issue new common stock. Security analysts are projecting that the common dividend will grow at a rate of 7% a year. The yield on 10 year Govt. bond is 4.00% and 3-month T-bill is 2.00%. The beta for Geo's stock is 1.00 and the expected stock market return is 10.50%. The appropriate bond risk premium is 3.00% for the bond-yield-plus risk premium approach. The yield on Geo Company's bond is 6.00%. What is Geo's cost of equity from retained earnings using the bond yield plus risk premium approach? (Calculate up to two decimal places, enter answer without percentage sign e.g. 5.10)