Suppose That the Median Price?to?earnings Ratio for the S&P 500

Suppose that the median price?to?earnings ratio for the S&P 500 is 20.If the long?run return on equity is 11.5 percent and the long?run growth in gross domestic product (GDP ) is expected to be 6 percent (3.5 percent real growth and 2.5 percent inflation) ,what is the cost of equity implied by the equity-denominated key value driver formula?

A) 7.9 percent.
B) 8.4 percent.
C) 8.9 percent.
D) 9.4 percent.