Stock in Country Road Industries has a beta of 1.46. The market risk premium is 7 1/2 percent, while T-bills are currently yielding 2 1/2 percent. Courtly Road's last dividend was $1.55 per share, and dividends are expected to grow at an annual rate of 4 1/2 percent indefinitely. The stock sells for $26.oo a share. What's the estimated cost of equity using the average return of the CAPM and the dividend discount model?

12.09 percent

14.06 percent

11.50 percent

11.38 percent