A firm is planning to invest in an automated packaging plant. You find a comparable firm, Leo's Design, which is engaged in a similar line of business. Leo's has a stock price of $16 per share, with 14 million shares outstanding. It also has 141 million in outstanding debt, with a yield on the debt of 3.8%. Leo's equity beta is 1. The risk-free rate is 5%, and the expected return on the market portfolio is 10%. Leo's unlevered cost of capital is %? (round two decimal places)