California Best (CB), a sport shoe store, expects an operating income of 2.3 million dollars this year. CB has no long-term debt. The firm is cosnidering an expansion proect. The current risk-free rate of return is 7% and the current market risk premium is 8.3%. If CB's beta is 20% greater than the overall market, what is the firm's cost of capital? Assume that CB has a marginal tax rate of 40%.