The Down and Out Co. just issued a dividend of $2.31 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 $50 a share, what is the company's cost of equity? (Do not round your intermediate calculations.)
a.) 10.34%
b.) 9.36%
c.) 9.62%
d.) 9.85%
e.) 4.95%