Piedmont Hotels Is an All-Equity Firm with 48,000 Shares of Stock

Piedmont Hotels is an all-equity firm with 48,000 shares of stock outstanding.The stock has a beta of 1.19 and a standard deviation of 14.8 percent.The market risk premium is 7.8 percent and the risk-free rate of return is 4.1 percent.The company is considering a project that it considers riskier than its current operations so has assigned an adjustment of 1.35 percent to the project's discount rate.What should the firm set as the required rate of return for the project?

A) 9.85 percent
B) 10.92 percent
C) 15.39 percent
D) 14.73 percent
E) 17.33 percent