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Company ZenTen is currently financed by 50% debt and 50% equity and has an equity beta of 1.20. Assume debt beta=0. The expected market return

Company ZenTen is currently financed by 50% debt and 50% equity and has an equity beta of 1.20. Assume debt beta=0. The expected market return is 8%, risk-free rate is 3%, and corporate tax rate is 20%. If the company were financed by 100% equity, what would be its cost of equity?

A. 6.33%

B. 6.91%

C. 7.74%

D. 8.00%

E. 9.00%

F. 13.80%

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