Stock in Country Road Industries has a beta of 0.94. The market risk premium is 8.5 percent, and T-bills are currently yielding 4.5 percent. The company's most recent dividend was $1.7 per share, and dividends are expected to grow at a 6 percent annual rate indefinitely. If the stock sells for $40 per share, what is your best estimate of the company's cost of equity? (Do not round your intermediate calculations.)

Multiple Choice

• 8.26%

• 9.58%

• 10.51%

• 12.49%

• 11.5%