Nagel Equipment has a beta of 0.88 and an expected dividend growth rate of 3.30% per year. The T-bill rate is 4.00%, and the T-bond rate is 4.95%. The annual return on the stock market during the past 4 years was 10.25%. Investors expect the average annual future return on the market to be 14.20%. Using the SML, what is the firm's required rate of return? Do not round your intermediate calculations.

a. 9.61%

b. 16.39%

c. 12.50%

d. 13.09%

e. 12.98%