Velcroft Company buys stock for a price of $12.50 per share and the stock is expected to pay a dividend of $1.35 at the end of the year and grow at a constant rate of 6%. What is the expected rate of return for Velcroft Company?

a. 13.4%

b. 12.2%

c. 16.8%

d. 15.5%

e. 14.9%