10. Kutluk Technologies is considering a major expansion program that has been proposed by the company's information technology group. Before proceeding with the expansion, the company must estimate its cost of capital. Suppose you are an assistant to Abdurahman, the financial vice president. Your first task is to estimate Kutluk's cost of capital. Abdurahman has provided you with the following data, which he believes may be relevant to your task. 1. The firm's tax rate is 40%. 2. The current price of Kutluk's 12% coupon, semiannual payment, noncallable bonds with 15 years remaining to maturity is RM1,153.72. Kutluk does not use short- term interest-bearing debt on a permanent basis. New bonds would be privately placed with no flotation cost. 3. The current price of the firm's 10%, RM100.00 par value, quarterly dividend, perpetual preferred stock is RM111.10. 4. Kutluk's beta is 1.2, the yield on T-bonds is 7%, and the market risk premium is estimated to be 6%. 5. Kutluk's target capital structure is 30% debt, 10% preferred stock, and 60% common equity. What is Kutluk's estimated cost of common equity using the CAPM approach? 14.2% 8.2% 13% none of them