An unlevered company that has a current value of $12,000,000 is considering borrowing $3,000,000 and using the borrowed funds to repurchase shares. The company can borrow at 4.75%. EBIT is expected to be $2,400,000 every year forever. Assume all available earnings are immediately distributed to common shareholders and all the M&M assumptions are satisfied. What is the company's unlevered cost of equity according to M&M Proposition I without taxes?