Division	Asset Beta	Next Period's Expected Free Cash Flow ($mm)	Expected Growth Rate
Oil Exploration	1.4	450	4.0%
Oil Refining	1.1	525	2.5%
Gas and Convenience Stores	0.8	600	3.0%

The risk-free rate of interest is 3% and the market risk premium is 5%.

1) Which is the cost of capital for the oil exploration division closest to?

A) 6.0%

B) 7.0%

C) 8.5%

D) 10.0%