London Inc. just paid an annual dividend of $1.2 on its common stock. The company has a longstanding policy of increasing its dividend by 4 percent annually. This policy is expected to continue. What is the firm's cost of equity if the stock is currently selling for $20 a share?

A. 10.24 percent

B. 13.26 percent

C. 12.38 percent

D. 11.52 percent