ABC Inc. is in the cell phone industry. The management of ABC is planning to develop an electric car to be financed with only equity. NIO Inc. and BYD Company are two companies that specialize in this electric car business. You are given the following financials for these firms: NIO Inc. has a stock price of $20 per share with 45 million shares outstanding. Its book value of debt is $100 million with a yield to maturity on the debt of 2%. NIO has an investment grade credit rating. NIO has an equity beta of 1.5, and it faces a tax rate of 21%. BYD Company has a stock price of $20 per share with 20 million shares outstanding. Its book value of debt is $450 million and market value of debt is $400 million. BYD has a debt beta of 0.2, an equity beta of 1.8, and it faces a tax rate of 21%. Assume that the risk-free rate is 2% and the expected market risk premium is 5%. If the management of ABC asks for an estimate of cost of capital with a small estimation error, then your estimate of the cost of capital for the ABC's electric car project is closest to