The Following Financial Information Is Available on Rawls Manufacturing Company

The following financial information is available on Rawls Manufacturing Company:
Current per share market price $48.00
Current (t = 0) per share dividend $3.50
Expected long-term growth rate 5.0%
Rawls can issue new common stock to net the company $44 per share.Determine the cost of internal equity capital using the dividend capitalization model approach.(Compute answer to the nearest 0.1%.)

A) 12.3%
B) 13.4%
C) 13.0%
D) 12.7%