Retained earnings versus new common stock Using the data for a firm shown in the following table, calculate the cost of retained earnings and the cost of new common stock using the constant-growth valuation model.

Current market price per share	Dividend growth rate	Projected dividend per share next year	Underpricing per share	Flotation cost per share
$62.00	7%	$3.10	$2.50	$2.50

The cost of retained earnings is ___%