Last week, Lester's Electronics paid an annual dividend of $2.00 on its common stock. The company has a longstanding policy of increasing its dividend by 6.0 percent annually. This policy is expected to continue. What is the firm's cost of equity if the stock is currently selling for $42.15 a share?

	A)	8.65%
	B)	12.24%
	C)	10.89%
	D)	9.76%
	E)	11.03%