Assume the historical return for ABC Company is 11.5% and its beta is .5. Further assume that the risk-free rate of return is 3% and the standard deviation is 30%. Based on these factors (using the Capital Asset Pricing Model) calculate the cost of equity. 

A. 8.5% 

B. 4.25% 

C. 6.25% 

D. 7.30%

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