Pan American Airlines' shares are currently trading at $60.17 each. The yield on Pan Am's debt is 5% and the firm's beta is 0.8. The T-Bill rate is 3.5% and the expected return on the market is 7.5%. The company's target capital structure is 35% debt and 65% equity. Pan American Airlines pays a combined federal and state tax rate of 25%. What is the estimated cost of common equity, employing the Capital Asset Pricing Model (CAPM)?

The estimated cost of common equity for Pan American Airlines is __%. (Round to two decimal places.)