Megatronix uses the subjective approach to assign discount rates to projects. For a particular project, the subjective adjustment is +4.75 percent. The firm has a pretax cost of debt of 7.8 percent and a cost of equity of 13 percent. The debt-equity ratio is 0.5 and the tax rate is 22 percent. What discount rate should Alpha Industries use for this project?

Discount rate = %