The CEO of Harding Media Inc

The CEO of Harding Media Inc.as asked you to help estimate its cost of common equity.You have obtained the following data: D? = $0.85; P? = $22.00; and g = 6.00% (constant) .The CEO thinks, however, that the stock price is temporarily depressed, and that it will soon rise to $40.00.Based on the DCF approach, by how much would the cost of common from reinvested earnings change if the stock price changes as the CEO expects?

A) -1.49%
B) -1.66%
C) -1.84%
D) -2.03%
E) -2.23%