N&N is a software company. In the current year, the firm reported operating earnings before interest and taxes of $500 million and these earnings are expected to grow 5 percent a year in perpetuity. The unlevered beta for other software firms is 1.40, and these firms have on average cash balances of 15 percent of firm value. If N&N has a debt ratio of 30 percent, a tax rate of 25 percent, a return on capital of 10 percent on operating assets, and a cost of debt of 12 percent before taxes. The risk-free rate is 6 percent, and market risk premium is 5.5 percent. Estimate the cost of capital