The following data pertains to Xena Corp.:

Xena Corp.

Total Assets

$23,610

Interest-Bearing Debt (market value)

$11,070

Average borrowing rate for debt

10.2%

Common Equity:

Book Value

$ 6,150

Market Value

$25,830

Marginal Income Tax Rate

37%

Market Beta

1.73

Assuming that the risk-free rate is 4.5% and the market risk premium is 6.2%, calculate Xena's cost of equity capital using the capital asset pricing model.

Select one:

A.8.9%

B.10.4%

C.13.4%

D.15.2%