Given the information below, what is a good estimate of this company's cost of common equity capital?

• current stock price = $89.31
• yield to maturity on the company's bonds = 6.2%
• long-term return on the S&P 500 = 11.5%
• risk-free rate = 3.2%
• total shareholders' equity = $17.8 million
• most recent stock dividend = $3.50
• company's stated growth rate of dividends = 2.5%

A) 4.02%

B) 6.52%

C) There is not enough information to determine R_e.