National Home Rentals has a beta of 1.24, a stock price of $22, and recently paid an annual dividend of $0.94 a share. The dividend growth rate is 4.5 percent. The risk-free rate is 3.1 percent and the expected market return is 10.6 percent. What is the firm's cost of equity?

Group of answer choices

10.90 percent

7.05 percent

10.68 percent

8.67 percent