A analyst gathered the following information about a stock:
·The market index value is currently 160.39.
·Level of earnings for companies in the index is $23.56 for last year.
·Expected growth rate of earnings is 5.6 percent.
·Dividend payout ratio is a constant 45 percent.
·The required return on the index is 12.2 percent.
What is the expected return over the next year for the index?

A.11.85%.

B.12.90%.

C.13.67%.