American Airlines has CAPM beta of 1.7, which is estimated over the time-period from 01/2017 to 12/2021. The market risk premium is 5.8 % per year, the yield-to-maturity (YTM) on a 3-year government bond is 1.4 % per year, the YTM on a 5-year government bond is 2.4 % per year and the YTM on a 10-year U.S. government bond is 3.4 % per year.

What is the cost of equity?

	A.	The cost of equity is 8.20%
	B.	The cost of equity is 9.91%
	C.	The cost of equity is 12.26%
	D.	The cost of equity is 5.80%
	E.	The cost of equity is 11.26%
	F.	The cost of equity is 9.20%
	G.	The cost of equity is 10.91%
	H.	The cost of equity is 11.91%
	I.	The cost of equity is 3.40%
	J.	The cost of equity is 13.26%