Amino Industries common shares sell for $100 per share. Aminoexpects to set their next annual dividend at $4.00 per share. IfAmino expects future dividends to grow at 5 percent per year,indefinitely, the current risk-free rate is 2 percent, the expectedrate on the market is 7 percent, and the stock has a beta of 1.5,what should be the best estimate of the firm's cost of equity?
Multiple Choice
18.50 percent
13.25 percent
9.25 percent
7.27 percent
