Suppose it's January $2021$ and you would like to estimate the unlevered cost of capital $(r_u)$ for Cowbell Corp. The current share price of Cowbell is $$18$ and there are

$10$ million shares outstanding.You have estimated Cowbell's equity beta as $1\mathrm{.}25,$ and its cost of debt $(r_D)$ as $2\mathrm{.}75\%.$ The risk$-$free rate is $1\mathrm{.}9\%$ and the market risk

premium is $5\%.$ In addtion, the table below shows the current balance sheet of the firm. Assume that all cash and short$-$term investments are excess cash. Based on the

information provided, what is the best estimate the unlevered cost of capital for Cowbell? Select one.

$1\mathrm{.}8\mathrm{.}15\%$

$6\mathrm{.}80\%$

$5\mathrm{.}60\%$

$6\mathrm{.}91\%$

$5\mathrm{.}5\mathrm{.}02\%$