The Down and Out Co. just issued a dividend of $2.16 per share on its common stock. The company is expected to maintain a constant 5 percent growth rate in its dividends indefinitely. If the stock sells for $35 a share, what is the company's cost of equity? (Do not round your intermediate calculations.)
a.) 10.91%
b.) 6.62%
c.) 12.05%
d.) 11.48%
e.) 11.17%