Regulation Insurance Has a Beta of 0

Regulation Insurance has a beta of 0.90, a dividend growth rate of 2.5 percent for the foreseeable future, a stock price of $47 per share, and an expected annual dividend of $0.60 per share next year.The market rate of return is 13.9 percent and the risk-free rate is 3.4 percent.What is the firm's average cost of equity?

A) 6.69 percent
B) 8.31 percent
C) 8.25 percent
D) 8.67 percent
E) 6.41 percent