ABC Inc.'s CFO hired you as a consultant to help her estimate the cost of capital. You have been provided with the following data: risk-free rate = 5.10%; market risk premium = 5.25%; and beta = 1.15. Based on the CAPM approach, what is the cost of equity of the company?

1. 12.27%

2. 11.14%

3. 12.67%

4. 8.62%

5. 7.60%