King Arms Tavern Incorporated is financed 100% with equity and intends to remain this way. King Arms Taverns common stock beta is 1.92, the expected market return (average market return) is 11%, and the risk-free rate is 2%. If all of King Arms Taverns equity is internal, what are the cost of equity and the weighted average cost of capital for King Arms Tavern?

19.28%

27.48%

21.12%

7.68%