Pan American Airlines' shares are currently trading at $69.25 each. The yield on Pan Am's debt is 4% and the firm's beta is 0.7. The T- Bill rate is 4% and the expected return on the market (E (k, )) is 96. The company's target capital structure is 25% debt and 75% equity . Pan American Airlines pays a combined federal and state tax rate of 35%. What is Pan Am's cost of equity? O A. 8.5% O B. 8.0% OC. 7.5% O D. 7.0% O E. 9.0%