Hartford Enterprises just paid an annual dividend of $1.56 per share. This dividend is expected to increase by 3% annually. Currently, the firm has a beta of 1.13 and a stock price of $28 a share. The risk-free rate is 3% and the market rate of return is 10.5%. What is your best estimate of Hartford’s cost of equity? Answer

a. | 8.74% | |

b. | 9.72% | |

c. | 9.38% | |

d. | 10.11% | |

e. | 11.48% |