Megatronix uses the subjective approach to assign discount rates to projects. For a particular project, the subjective adjustment is +0.75 percent. The firm has a pretax cost of debt of 9.8 percent and a cost of equity of 14.6 percent. The debt-equity ratio is 0.55 and the tax rate is 24 percent. What discount rate should Alpha Industries use for this project?

Discount rate =