Shallow Drilling, Inc. has $89,400$ shares of common stock outstanding with a beta of $1\mathrm{.}30$ and a market price of $$48\mathrm{.}00$ per share. There are $17,750$ shares of $6\mathrm{.}60\%$ preferred stock outstanding with a stated value of $$100$ per share and a market value of $$79\mathrm{.}00$ per share. The company has $6,710$ bonds outstanding that mature in $15$ years. Each bond has a face value of $$1,000,$ an $8\mathrm{.}60\%$ semiannual coupon rate, and is selling for $96\mathrm{.}00\%$ of par. The market risk premium is $10\mathrm{.}59\%,$ T$-$Bills are yielding $2\mathrm{.}81\%,$ and the tax rate is $19\%.$ What discount rate should the firm apply to a new project's cash flows if the project has the same risk as the company's typical project?

Group of answer choices

$8\mathrm{.}78\%$

$9\mathrm{.}40\%$

$10\mathrm{.}60\%$

$10\mathrm{.}74\%$

$11\mathrm{.}39\%$