Alphatec is seeking to raise capital from a large group of investors to expand its operations. Suppose the S&P 500 portfolio is the efficient portfolio of risky securities (so that these investors have holdings in this portfolio). The S&P 500 portfolio has a volatility of 15% and an expected return of 10%. The investment is expected to have a volatility of 40% and a 50% correlation with the S&P 500. If the risk-free interest rate is 4%, what is the appropriate cost of capital for Alphatecs expansion?