From a financial consultant you receive the following information:

I You can make a private bond placement. A coupon bond with 5% coupon rate, semi-annual coupon payments and maturity in 10 years would have a price of 84.3% of face value.

I The unlevered equity beta for similar business models is 1.8.

I The risk-free rate is 2.1% p.a., the expected return on the stock market is 8.8% p.a.

I Your target capital structure includes 65% debt and 35% equity. The capital structure is assumed to remain constant.

Find the cost of capital to evaluate the NPV of this project