In computing the cost of capital, the cost of debt capital is determined by a. Annual interest payment divided by the proceeds from debt issuance. b. Interest rate times (1 the firms tax rate) c. Annual interest payment divided by the book value of the debt. d. The capital asset pricing model

DORCAS Corporation's stock has a market price of $20.00 and pays a constant dividend of $2.50. What is the required rate of return on its stock? A. 13.0% B. 12.5% C. 12.0% D. 11.5%