1. Assume the market value of Exxon Mobils equity, preferred stock, and debt are $10 million, $6 million, and $14 million, respectively. The preferred stock outstanding pays a 9% annual dividend and has a par value of $100. The common stock currently has a beta of 1.15, the preferred stock currently sells for $80 per share, and the 10% semiannual bonds have 17 years to maturity and sell for 91% of par. The market risk premium is 11.5%, T-bills are yielding 7.5%, and the firm's tax rate is 32%. What discount rate should the firm apply to a new project's cash flows if the project has the same risk as the firm's typical project?