UWY's expected dividend next year is $2.50 per share. They have maintained a constant payout ratio of 50% during the past 7 years. Seven years ago its EPS was $1.50. The firm's beta coefficient is 1.2. The estimated market risk premium is 6%, and the risk-free rate is 4%. Roland's A-rated bonds are yielding 9%, and its current stock price is $30. What is the estimated cost of UWYs retained earnings, r_s?

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