Question 4 Defense Electronics, Inc. (DEI), a market share leader in radar detection systems (RDSs) is looking at setting up a manufacturing plant to produce a new line of RDS. DEI has hired you as a financial consultant to estimate the appropriate cost of capital to use when evaluating this project. The following market data on DEI's securities are current: Security Description Debt: 240,000 7.5% coupon bonds outstanding, 20 years to maturity, selling for 94% of par, the bonds have a $1000 par value each and make semiannual payments. Common stock:9,000,000 shares outstanding, selling for $71 per share; the beta is 1.2 The expected market return currently stands at 15% and the risk free rate is 5%. DEI's tax rate is 35%. What should be DEI's cost of capital