Charleston Mills has a debt-equity ratio of 0.62 and a tax rate of 35 percent. The firm has a $500,000 bond issue outstanding that is currently valued at 94 percent of par value. The bond carries a 7 percent, semiannual coupon and matures in 14.5 years. The common stock is selling for $56 a share and has a beta of 1.08. The firm is analyzing a project that it feels is riskier than the company's current operations and thus the firm's managers have assigned an adjustment factor of 1.5 percent to the project. What is the project's required rate of return if the market rate is 10.8 percent and Treasury bills are yielding 2.7 percent?