Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy, with each outcome being equally likely. The initial investment required for the project is $90,000, and the project's cost of capital is 15%. The risk-free interest rate is 5%.

If you determine to make a lending to the project with $5000. The tax rate is 20%. The firms equity cost of capital will be closest to?