Torreto Industries stock has a beta of 1.15. The firm just paid a dividend of $0.45 and the dividends are expected to grow at 4%. The expected return on the market is 11% and treasury bills are yielding 3.7%. The most recent stock price for the company is $72. What is the company's cost of equity using the dividend growth model?

a) 4.65%

b) 4.70%

c) 7.60%

d) 6.22%

A is correct