Backyard Tavern Has a Beta of 1

Backyard Tavern has a beta of 1.5 and a cost of equity of 13.2 %. The risk-free rate of return is 4.2 %. Backyard is considering a project with a beta of 1.7 and a project life of eight years. An appropriate discount rate for the project is:

A) 10.80 %.
B) 12.16 %.
C) 14.40 %.
D) 15.84 %.
E) 18.00 %.