Based on the following data for AAA stock, what is the implied market risk premium?

Based on the following data for AAA stock, what is the implied market risk premium?

Dividend just paid, D0 =$4

10-year Treasury bond yield=6%

Beta for the stock=1.5

Current market price, P0=$125.71

Constant dividend growth rate=10%

Assume that the stock is priced in equilibrium.

Select one:

a. 5.96%

b. 5.00%

c. 4.12%

d. 6.33%