Use this info for two questions. Stock in CDB, Inc. has a beta of 1.07. The market return (not risk premium) is 10.00%, and T-bills are currently yielding 4.4%. CDBs most recent dividend was $2.30 per share, and dividends are expected to grow at a 4.60% annual rate indefinitely. The stock sells for $47.15 per share.

Using the CAPM, what is your estimate of CDBs cost of equity?

a. 10.39%

b. 12.35%

c. 11.85%

d. 10.90%

e. 11.34%