Stock in ABC Enterprises has a beta of 1.06. The market risk premium is 6.9 percent, and T-bills are currently yielding 3.75 percent. ABC's most recent dividend was $1.56 per share, and dividends are expected to grow at a 4 percent annual rate indefinitely. If the stock sells for $43.25 a share, what is your best estimate of ABC's cost of equity?

A: 7.78 percent

B: 9.09 percent

C: 9.41 percent

D: 9.69 percent

E: 8.82 percent