Amgel Manufacturing Companys current capital structure is comprised of 30% debt and 70% equity (based on market values). Amgels equity beta (based on its current level of debt financing) is 1.20, and its debt beta is 0.29. Also, the risk-free rate of interest is currently 2% on long-term government bonds. Amgels investment banker advised the firm that, according to her estimates, the market risk premium is 5.25%.

What is your estimate of the cost of equity capital for Amgel (based on the CAPM)?