Company has a capital structure of 45% equity and 55% debt It just paid out a dividend of $2.00 per share and the company has $1, 500,000 of retained earnings The dividends are expected to grow at...

Company has a capital structure of 45% equity and 55% debt It just paid out a dividend of $2.00 per share and the company has $1, 500,000 of retained earnings The dividends are expected to grow at 7.0% per year in perpetuity. Company shares are currently trading at $21.00. The Underwriter will charge issuing expenses of 8.0% on the existing share market value. The tax rate of company is 40%. What is company's cost of retained earning?

A 10.19%

B 17.70%

C 5.71%

D 17.19%

E 18.08%

F 16.52%