ABC Corp has a market value of debt to equity ratio of 1.5. its book value of debt to equity ratio is 0.5. the firms bonds have a low credit rating with an annual coupon rate of 8%. the current yield to maturity of its bonds is 11%. the company has an equity beta of 1.2 and a debt beta of 0.5.

Assume that the risk free interest rate is 1% and expected market risk premium is 4%. ABC Corp faces a tax rate of 21%. suppose its management is consodering a project that has the same risk and financing mux as the firm.

the cost of capital for the poject is ____%?