Q3) Floyd Industries stock gas a beta of 1.15. The company just paid a dividend of $0.75 and the dividends are expected to grow at 4.5 percent per year. The expected return on the market is 11 percent and the Treasury bills are yielding 3.7 percent. The most recent stock price for the company is $84. Calculate the cost of equity using the security market line (SML) method

A) 12.80%

B) 13.50%

C) 14.25%

D) 11.50%

E) 12.10%

r_A = r_f + (r_M r_f)bA