You pay $20 for one share of HyperTension Inc. today. What is the expected one-year holding period return if the stock pays a $1.25 dividend and sells for $21.50 one year from now?

a) 6.25%

b)7.50%

c) 11.50%

d)13.75%

I know the answer is d, but I don't understand why. Please show step workings with the name of the formulas. Thank you