Smartbet Contracting's beta of debt is $0\mathrm{.}17$ and its capital

structure is $25\%$ debt and $75\%$ equity. Smartbet is a private firm.

To estimate its cost of equity three publicly traded firms

operating in the same industry have been identified, with their

data presented in the table. What is Smartbet's cost of equity if

the tax rate is $22\%,$ the risk$-$free rate is $1\mathrm{.}6\%,$ and the market risk premium is $5\mathrm{.}4\%?$

a$.9\mathrm{.}21\%$

b$.8\mathrm{.}51\%$

c$.11\mathrm{.}31\%$

d$.10\mathrm{.}61\%$

e$.9\mathrm{.}91\%$