California Best (CB), a Sport Shoe Store, Expects an Operating

California Best (CB) , a sport shoe store, expects an operating income of$2.3 million this year.CB has no long-term debt.The firm is considering as expansion project.The current risk-free rate of return is 7% and the current market risk premium is 8.3%.If CB's beta is 20% greater than the overall market, what is the firm's cost of capital? Assume that CB has a marginal tax rate of 40%.

A) 8.3%
B) 16.96%
C) 9.96%
D) 15.3%