You are trying to estimate the cost of equity for a privately owned cruise ship company called the Titanic Cruise Lines. You know that the company's cost of debt is 3% and its debt-to-enterprise value ratio is 20%. You have collected the following information on publicly traded cruise lines that are comparable. You also know that the risk-free rate is 1.9% and the market risk premium in 5%. What is the best estimate for the cost of equity of Titanic Cruise Lines ? Select one.

(hint: Use the average unlevered cost of capital of the other cruise ship companies to calculate the cost of equity for Titanic Cruise Lines )

Company Name	Equity Beta	Market Capitalization (in $ billions)	Market Value of Debt (net of excess cash) (in $ billions)	Cost of Debt (in %)
Royal Caribbean	2.7	22.25	16.3	4.0%
Norwegian	2.72	9.9	8.3	4.5%
Carnival	2.23	26.6	18.8	3.9%
Lindblad	2.46	0.78	0.30	3.5%

	I.	14.54%
	II.	12.24%
	III.	10.39%
	IV.	15.81%