The Down and Out Co. just issued a dividend of $2.46 per share on its common stock. The company is expected to maintain a constant 4 percent growth rate in its dividends indefinitely. If the stock sells for $35 a share, what is the company's cost of equity?
- 11.88%
- 11.31%
- 11.03%
- 10.74%
- 7.42%