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Peson, Inc., a manufacturer of printers, is attempting to determine its cost of common equity for cost of capital purposes. Pesonís long-term debt is rated AA by Standard & Poorís. Pesonís common shares trade on the NASDAQ and the current market price is $26.87. The most recent yearly common share dividend Peson paid common shareholders was $1.04. The consensus forecast of security analysts who follow Pesonís common shares is that earnings growth will average 12.5% over the long term. Pesonís marginal income tax rate is 40%. Using the dividend discount model, what is Pesonís cost of equity capital for cost of capital purposes?