Jack's construction co. has 80 bonds outstanding that are selling at their par values of $1000 each. Bonds with similar characteristics are yielding a pre-tax cost of debt of 8.6%. The firm also has 4000 shares of common stock outstanding. The stock has a beta of 1.1 and sells for $40/share. The US t- bill id yielding 4%, the market risk premium id 8%, and the firm tax rate is 21%. The firm is considering a 5 year expansion project that costs 48M and will generate an annual after tax cash flow of 13.5M beginning at time 1. Calculate the firms cost of capital.