Amino Industries Common Shares Sell for $100 Per Share

Amino Industries common shares sell for $100 per share. Amino expects to set their next annual dividend at $4.00 per share. If Amino expects future dividends to grow at 5 percent per year, indefinitely, the current risk-free rate is 2 percent, the expected rate 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?

A) 18.50 percent
B) 13.25 percent
C) 9.25 percent
D) 7.27 percent