CCC is raising capital for a new company called Z Balloons Inc. Z Balloons will manufacture and sell festive balloons. Because of the shortage of helium, the balloons will be filled with nitrous oxide instead. Z Balloons plans to finance the business with common equity and long-term debt. It plans to sell 12 million shares of common stock and 200,000 bonds. Each bond will have a coupon rate of 5%, will pay its coupons semi-annually and will have a face value of $1,000.The common stock will be issued at a price of $19.5 a share and has a beta of 1.1. The bonds will sell for 89% of face value and have a 6.25% yield to maturity. The market risk premium is 5.25%, T-bills are yielding 3.5%, and Z Balloons' tax rate is 36%. What is Z Balloons' cost of equity (after tax)?