You are forecasting the returns for Blue Company, a plumbing supply company, which pays a current dividend of $11.00. The dividend is expected to grow at a rate of 4.0 percent. You have identified two public companies, Kingbird and Oriole, which appear to be comparable to Blue. Kingbird has the same total risk as Blue and a beta of 1.70. Oriole, in contrast, has a very different total risk but the same market risk as Blue. Orioles beta is 1.50. The market risk premium is 5.00 percent and the risk-free rate is 1.50 percent.

Determine the required return for Blue using the appropriate beta?