HD Oil has an overall cost of equity of 13.6 percent and a beta of 1.20. The firm is financed solely with common stock. The risk-free rate of return is 3.4 percent. What is an appropriate cost of capital for a division within the firm that has an estimated beta of 1.18?

		13.43 percent
		14.41 percent
		12.54 percent
		11.67 percent
		12.80 percent