The earnings, dividends, and common stock price of Carpetto Technologies Inc. are expected to grow at 5% per year in the future. Carpetto's common stock currently sells for $45.50 per share. Carpetto just paid a dividend of $3.20, and it will pay its next dividend of $3.36 in one year. What is its cost of common equity? Round your final answer to two decimal places.

A.12.38%

B.12.03%

C. 13.00%

D. 12.69%

E. None of the above are correct.