Southern Home Cookin' just paid its annual dividend of $$0\mathrm{.}65$ a share.

Dividends are expected to grow at $6\%$ forever. The stock has a market

price of $$13$ and a beta of $1\mathrm{.}12.$ The return on the U$.$S$.$ Treasury bill is $2\mathrm{.}5$

percent and the market risk premium is $6\mathrm{.}8$ percent. What is the cost of

equity?

$9\mathrm{.}30$ percent

$10\mathrm{.}71$ percent

$10\mathrm{.}00$ percent

$10\mathrm{.}30$ percent