10-year Treasure Bond annual rate of return is 2.5%. Company B's stock beta value is 1.50. S&P 500 Stock Index has an expected 12% annual rate of return for the next 12 months. Using Capital Asset Pricing Model (CAP-M) to determine Company B's cost of equity.

Group of answer choices

16.75%

12.50%

20.50%

14.50%