H. J. Corp. common stock paid $2.50 in dividends last year (DO). Dividends are expected to grow at a 12-percent annual rate forever. If H. J.'s current market price is $40.00, what is the stock's expected rate of return (nearest .01 percent)?
a. 5.50%
b. 18.25%
c. 19.00%
d. 11.00%