Calculating Cost of Equity [LO1]. The Drogon Company just issued a dividend of $2.26 per share on its common stock. The company is expected to maintain a constant 5 percent growth rate in its dividends indefinitely. If the stock sells for $40 a share, what is the company's cost of equity?
Multiple Choice
a) 6.06%
b) 11.48%
c) 10.93%
d) 10.39%
e) 10.65%