How to solve

Market price of RetCar Company is $$40$ per share. The last dividend paid by RetCar was $$3\mathrm{.}77$ per share and the dividend is expected to grow at a constant rate of $6$ percent per year. What is the firm's cost of equity?

$16\mathrm{.}5\%$

$16\mathrm{.}75\%$

$16\mathrm{.}00\%$

$17\mathrm{.}05\%$

$17\mathrm{.}30\%$