Stock in ABC Enterprises Has a Beta of 1

Stock in ABC Enterprises has a beta of 1.06.The market risk premium is 6.8 percent,and T-bills are currently yielding 3.2 percent.ABC's most recent dividend was $1.56 per share,and dividends are expected to grow at a 4 percent annual rate indefinitely.If the stock sells for $43 a share,what is your best estimate of ABC's cost of equity?

A) 7.78 percent
B) 8.82 percent
C) 9.09 percent
D) 9.41 percent
E) 9.69 percent