CCC is an unlevered firm with a cost of capital of 10.2%. The company is considering adding debt to its capital structure to reduce equity. Specifically, the company is evaluating the consequences of adding $7 million in perpetual debt at a pre-tax cost of 5.1%. The firm expects to generate EBIT of $9 million every year into perpetuity. Assume interest expense is tax deductible. The firm pays a tax rate of 36%. Ignore financial distress costs.

Based on MM Prop II, what will be CCC's new cost of equity if it takes on the debt?