According to the yield curve, the appropriate risk free rate (i.e. a 10Y US Bond) is 3.0% and the Market Risk Premium is 12.0%. A stock has sensitivity of 1.2x the move in the broad equity market (i.e. Beta = 1.2). According to the Security Market Line Method, the appropriate cost of equity is:
A) 13.8%
B) 14.4%
C) 16.8%
D) 17.4%
E) 21.0%