The Down and Out Co. just issued a dividend of $2.81 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 $50 a share, what is the company's cost of equity? (Do not round your intermediate calculations.)
A.) 5.92%
B.) 9.84%
C.) 9.35%
D.) 9.62%
E.) 10.34%