The Common Stock of Tommy's Tools Sells for $27

The common stock of Tommy's Tools sells for $27.50. The firm's beta = 1.2, the risk-free rate is 4%, and the market risk premium is 8%. Next year's dividend is expected to be $1.50. Assuming that dividend growth is expected to remain constant for Tommy's over the foreseeable future, what is the firm's anticipated dividend growth rate?

A) 7.6%
B) 7.8%
C) 8.1%
D) 9.2%
E) 10.1%