The common stock of Serenity Homescapes has a beta of 1.21 and a standard deviation of 17.8 percent. The market rate of return is 13.5 percent and the risk-free rate is 3.2 percent. What is the cost of equity for this firm? Please explain with full formula.

A) 15.66 percent B) 13.61 percent C) 13.93 percent D) 16.25 percent E) 14.90 percent