Use the following information to answer questions $12$ to $14$:

Alpha Inc. which is a publicly traded company uses a mix of debt and equity to finance its operations, with an equity portion of $70\%,$ the rest is debt. Shares of the common stock are currently selling at $$120.$ The bonds of the firm are currently trading at $$1200,$ have an annual coupon rate of $6\%,20$ years to maturity and a face value of $$1000.$ The company has a beta of $1\mathrm{.}60$ and a $35\%$ marginal tax rate. The market risk premium is $5\mathrm{.}5\%$ and the risk$-$free rate is $5\%.$

What is the cost of equity?

Question $12$ options:

$11\mathrm{.}9\%$

$13\mathrm{.}8\%$

$11\mathrm{.}2\%$

$10\mathrm{.}4\%$