Outside Johnnie's Has a Beta of 1

Outside Johnnie's has a beta of 1.3 and a cost of equity of 12.3 %. The risk-free rate of return is 4.5 %. Johnnie's is considering a project with a beta of 1.4 and a project life of six years. An appropriate discount rate for the project is:

A) 12.33 %.
B) 12.50 %.
C) 12.78 %.
D) 12.90 %.
E) 13.11 %.