Wayward Tours has an unlevered cost of capital of 15.1 percent, a tax rate of 34 percent, and expected earnings before interest and taxes of $26,100. The company has $25,000 in bonds outstanding that have a coupon rate of 7.6 percent. The bonds are selling at par. What is the cost of equity?

1. 14.31%

2. 16.37%

3. 14.64%

4. 15.08%

5. 16.59%