Cost of capital ABC is a small, publicly traded construction company with 50 million shares outstanding trading at $10 a share. ABC has:

Unlevered beta of 1.1

One bank loan with interest payments of $5 million a year for 5 years and a principal payment of $250 million

Rating of Baa, for which the default spread is 2%

Marginal tax rate of 40%

The risk-free rate is 2.5%, and the equity risk premium is 5.5%. What is the current cost of capital for ABC?