The Lory Company Had Net Earnings of $127,000 This Past

Multiple Choice

The Lory Company had net earnings of $127,000 this past year. Dividends of $38,100 were paid. The company's equity was $1,587,500. If Lory has 100,000 shares outstanding with a current market price of $11.625 per share,and the growth rate is 5.6%,what is the required rate of return?

A) 4.2%
B) 6%
C) 9%
D) 14%
E) None of these.