Morris Interiors is a chain of furniture retail stores. R. S. Green is a furniture maker and a supplier to Morris Industries. Morris Interiors has a beta of 1.36 as compared to R. S. Green's beta of 1.07. The risk-free rate of return is 3.9 percent and the market risk premium is 8 percent. Both firms are all equity financed. What discount rate should Morris Interiors use if it considers a project that involves the manufacturing of furniture? (round answer to whole number with two decimal points: i.e., use 1.23 percent instead of 0.0123 )