Mikkelson Corporation's Stock Had a Required Return of 12

Mikkelson Corporation's stock had a required return of 12.50% last year,when the risk-free rate was 3% 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? (Hint: First calculate the beta,then find the required return. ) Do not round your intermediate calculations.

A) 12.87%
B) 16.50%
C) 13.04%
D) 12.71%
E) 14.36%