Golding enterprises has 50,000 shares outstanding, of which 20% are preferred shares and 80% are common shares. The preferred shares pay $2.00 per year in dividends and are priced at $40 per share. The last dividend paid to common stockholders was 5$ per share and the company experts to grow at 2% forever. The current price of the common stock is $80. The company currently has no long term debt. Make sure you carry enough decimals when you do your calculation.

What is the expected return on this common stock of golding enterprises?

A. 9.256%

B. 7.516%

C. 8.375%

D. 6.678%

E.10.001%