SOURCE MUSIC has a stock price of $$55,$ a beta of $1\mathrm{.}2,$ and just paid an annual dividend of $$1\mathrm{.}125$ per share. The dividend growth rate is expected to be $7\mathrm{.}5$ percent per year. What is the estimated cost of equity using the dividend discount model? $(10\%)$

A$.8\mathrm{.}50\%$

B$.8\mathrm{.}89\%$

C$.9\mathrm{.}27\%$

D$.9\mathrm{.}55\%$

E$.9\mathrm{.}70\%$