The variance of the stock is 50%, and the variance of the market is 20%. The current risk-free rate is 3% (it was 5% one year ago) and the market risk premium is 8.76%. The stock is currently selling for $50, down $4 over the past year; it has paid a dividend of $2 during the past year and expects to pay a dividend of $2.50 over the next year. Royal Inc. has a tax rate of 40%.

The expected return on the stock is 15.26%.

What would you have expected for Royal Inc. return over the past year.

A. % 19.41

B. % 18.12

C. % 17.26

D. % 15.51