A firm has common stock with a market price of $55 per share and an expected dividend of $2.81 per share at the end of the coming year. The dividends paid on the outstanding stock over the past five years are as follows: year divdiend

1 $2.00

2 2.14

3 2.99

4 2.45

5 2.62

The cost of the firm's common stock equity is ________.

Select one:

a. 4.1 percent

b. 15.4 percent

c. 12.1 percent

d. 5.1 percent