Stock in Country Road Industries has a beta of 1.11. The market risk premium is 9 percent, and T-bills are currently yielding 4 percent. The company's most recent dividend was $1.8 per share, and dividends are expected to grow at a 6.5 percent annual rate indefinitely. If the stock sells for $35 per share, what is your best estimate of the company's cost of equity? (Do not round your intermediate calculations.)

rev: 09_20_2012

10.96%

9.55%

11.98%

12.98%

13.99%