A firm has $30\%$ debt and $70\%$ equity in its capital structure. The firm's stock has a current beta of $1\mathrm{.}3.$ The risk free rate is $5\%$ and the market risk premium is $6\%.$ The interest rate on the firm's debt is $8\%.$ The marginal tax rate is $35\%.$ The stock does not pay a dividend. What is the firm's unlevered cost of equity?

Question $4$ options:

a$)$

$11\mathrm{.}1\%$

b$)$

$6\mathrm{.}0\%$

c$)$

$10\mathrm{.}5\%$

d$)$

$12\mathrm{.}8\%$