You expect KT industries (KTI) will have earnings per share of $3 this year and expect that they will pay out $2.50

of these earnings to shareholders in the form of a dividend. KTI's return on new investments is 13% and their equity cost of capital is 14%.

The expected growth rate for KTI's dividends is closest to:

A. 2.3%

B. 1.3%

C. 2.2%

D. 0.9%