1. Stock in Nantec Corporation has a beta of 1.4. The market risk premium is 8%, and T-bills are currently yielding 5.5%. The company's most recent dividend was $2 per share, and dividends are expected to grow at a 5% annual rate indefinitely. If the stock sells for $42 per share, what is your best estimate of the company's cost of equity?

   13.35%

   14.46%

   15.57%

   16.68%

   17.79%