You know the following details about stock KDE. The EPS next year will be $1.30, the dividend payout rate will be 40%, the retention rate will be 60%, the return on new investment will be 9%, and the current fair price under the DDM is $45. What is KDEs equity cost of capital?

Instruction: Type your answer in the unit of percentage point, and round to three decimal places. E.g., if your answer is 0.0106465 or 1.06465%, should type ONLY the number 1.065, neither 0.0106465, 0.0106, nor 1.065%, because I already have percentage sign at the end of the problem. Otherwise, Blackboard will treat it as a wrong answer.