The Down and Out Co. just issued a dividend of $2.76 per share on its common stock. The company is expected to maintain a constant 6 percent growth rate in its dividends indefinitely. If the stock sells for $50 a share, what is the company's cost of equity? (Do not round your intermediate calculations.) rev: 09_20_2012

11.26%

12.44%

11.85%

11.52%

5.97%