Question Alpha Industries uses the subjective approach to assign discount rates to projects. For a particular project, the subjective adjustment is +8.5 percent. The firm has a pretax cost of debt of 6.4 percent and a cost of equity of 12.3 percent. The debt-equity ratio is 0.6 and the tax rate is 12 percent. What discount rate should Alpha Industries use for this project?

Discount rate = %