Martha's Interiors Has a Beta of 1

Martha's Interiors has a beta of 1.2. The market risk premium is 6 percent and the risk-free rate of return is 4 percent. By how much will the cost of equity increase if the company completes an
Acquisition such that their company beta rises to 1.4?

A) 0.12 percent
B) 0.24 percent
C) 1.20 percent
D) 2.40 percent
E) 2.47 percent