ETM Corp. is evaluating a new project which has an unlevered beta of 1.1. The project will be financed with 40 percent debt with a cost of 7 percent. The risk-free rate is 5 percent and the market risk premium is 8 percent. If ETM's tax rate is 30 percent, what is the project cost of capital?

• 10.2 percent
• 11.7 percent
• 12.7 percent
• 13.5 percent
• 17.9 percent

Answer is 12.7%. Could you please show me all the steps to get the answer