The Red Candy Cane just paid a dividend of $0.12 per share. The firm plans to increase the dividend by

4.2

percent per year indefinitely. What is the firm's cost of equity if the current stock price is $6.50 a share?

Question content area bottom

Part 1

A.

6.12

percent

B.

2.57

percent

C.

6.05

percent

D.

23.44

percent

E.

1.85

percent