Suppose the market cap of Retail Company A is $$40$ million and the market value of its debt is $$10$ million. Assume that the company's stock has a beta of $1\mathrm{.}2$ and its cost of debt is $5\%,$ the risk$-$free rate is the $2\%,$ the expected market risk premium is $7\mathrm{.}5\%,$ and the tax rate is $40\%.$ The company is deciding between two mutually exclusive projects. The company could either invest in an expansion project that involves setting up new retail stores or a diversification project that involves the acquiring commercial real estate $($specifically strip malls$)$ to lease to other retailers and restaurants. There are two comparable $$pure$-$play$$ firms that are solely engaged in commercial real estate: i$)$ Real Estate Company B$,$ which has no debt in its capital structure and has an equity beta of $0\mathrm{.}9$ and ii$)$ Real Estate Company C$,$ which has a debt$-$to$-$equity ratio of $0\mathrm{.}1,$ an equity beta of $0\mathrm{.}93,$ and a tax rate of $40\%.$ What discount rate should Retail Company A use when deciding whether or not to invest in the retail expansion project? Assume debt interest payments are tax deductible.