Hubbard Industries is an all-equity firm whose shares have an expected return of

10.9%.

Hubbard does a leveraged recapitalization, issuing debt and repurchasing stock, until its debt-equity ratio is

0.66.

Due to the increased risk, shareholders now expect a return of

17.1%.

Assuming there are no taxes and Hubbard's debt is risk-free, what is the interest rate on the debt?