The Sugar Cookie Company just paid its annual dividend of $0.45 a share. The stock has a market price of $21 and a beta of 0.88. The return on Treasury bills is 4.2% and the market has an 11.8% rate of return. What is the cost of equity for the Sugar Cookie Company?

6.69%

8.27%

10.89%

13.01%

14.58%