Mae Kioko, an analyst with Oswaid Technologies, is conducting a capital budgeting analysis on an investment the firm is considering making in Argentina. The project being considered is expected to cost $200 million, and should produce net cash flows of $50 million per year for the next seven years. Since Argentina is a developing market, Kioko believes that it is appropriate to include a country riskpremium when calculating the cost of equity. Kioko has researched yields in Argentina, and has observed that Argentina's. 10-year government bond yield is 9.8%, compared to a 4.6% yield for a similar 10-year U.S. government bond. Kioko also observes that the annualized standard deviation of the Argentina Merval stock exchange is 36%, which is higher than both the standard deviation of the S8P 500 at 18%, and the annualized standard deviation of Argentina's dollar-donominated government debt at 25% The country risk premium we should add to the cost of equity to capture Argentina's country risk is: 10.40% 7.49% 8.3%