Mikkelson Corporation's stock had a required return of 13.50% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return?
A. 16.36%
B. 16.17%
C. 15.52%
D. 16.87%
E. 20.58%