Last week, Baxter Industries paid their annual divident of $1.34 on their common stock. The company predicts that the dividend will increase by 3.5 percent each year indefinitely. What is the firm's cost of equity if the stock is selling for $43 a share. Please show work:

A. 4.89 percent

B. 6.62 percent

C. 6.73 percent

D. 7.12 percent

E. 7.38 percent