Excelor stock is expected to pay $2.70 per share as its next annual dividend. The firm has a policy of increasing the dividend by 9.5 percent annually. The stock has a market price of $13.59 and a beta of 2.5. The market risk premium is 8.53 percent and the risk-free rate is 4.75 percent. What is the cost of equity?

28.11 percent

27.07 percent

27.72 percent

26.64 percent