Use 5.5% as your market risk premium and 40% as your tax rate where none is specified. In December 2015, Boise Cascades stock had a beta of 1.05. The Treasury bill rate at the time was 0.8%, and the Treasury bond rate was 6.4%. The firm had debt out- standing of $1.7 billion and a market value of equity of $1.5 billion; the corporate marginal tax rate was 36%.

Estimate the expected return on the stock for a long-term investor in the company.

Group of answer choices

12.175%

9.998%

9.42%

11.63%