A MNC is trying to estimate its cost of equity for inclusion on its calculations of the WACC. the company uses the following information based on the constant-growth DDM

It has just paid a dividend of $2.08 per share. the constant growth estimated for the company is 6%/year. the common stock of the company is selling for $16/ sahre. The marginal tax rate is 40%.

The cost of equity based on this information is ?

a) 19.78%

b) 20.58%

c) 12.73%

d) 7.75%