ADK Industries Common Shares Sell for $60 Per Share

Multiple Choice

ADK Industries common shares sell for $60 per share.ADK expects to set their next annual dividend at $3.75 per share.If ADK expects future dividends to grow at 9 percent per year,indefinitely,the current risk-free rate is 4 percent,the expected rate on the market is 11 percent,and the stock has a beta of 1.5,what should be the best estimate of the firm's cost of equity?

A) 15.25 percent
B) 14.50 percent
C) 14.88 percent
D) 15.03 percent