Margo Channing, the financial analyst for Eve's Broadway Production company, has been asked by management to estimate a cost of equity for use in the analysis of a project under consideration. In the past, dividends declared and paid have been very sporadic. Because of this, Ms. Channing elects to use the CAPM approach to estimate the cost of equity. the rate o the short term U.S. Treasury bills is 3 percent and the expected rate of return on the overall stock market is 11 percent. Eve's Broadway Production Company has a beta of 1.6. Wha will Ms. Channing report as the cost of equity?