If the risk free rate of return is $5\%,$ the market risk premium is $7\%,$ and a company's stock has a beta of $\mathrm{.}9.$ what is the investor's required return that should be used for capital budgeting purposes?

$12\mathrm{.}4\%$

$11\mathrm{.}3\%$

$14\mathrm{.}2\%$

$11\mathrm{.}5\%$