Southern Home Cookin' just paid its annual dividend of $.75 a share. The stock has a market price of $30 and a beta of 1. The return on the U.S. Treasury bill is 3 percent and the market risk premium is 13 percent. What is the cost of equity?

Multiple Choice

• 19.60 percent

• 16.00 percent

• 17.72 percent

• 12.04 percent

• 13.47 percent