12. Arizona Rock, an all-equity firm, currently has a beta of 1.25, a risk-free rate of seven percent, and the return on the market is 14 percent. Suppose the firm sells 10 percent of its assets (beta of 1.25) and purchases the same proportion of new assets with a Beta f 1.1. What will be the firm's new overall required rate of return? What rate of return must the new assets produce?

a. 15.645%; 15.645%.

b. 15.75%; 14.7%.

c. 15.645%:14.7%.

d. 15.75%; 15.645%.

e. 14.75%: 15.75%