The Hopkinton Company just paid $2.25 as its annual dividend. The dividends have been increasing at a rate of 5% annually and this trend is expected to continue. The stock is currently selling for $63.60 a share. What is the rate of return on this stock?

A) 3.60%
B) 3.70%
C) 8.7%
D) 11.8%

Answer: C