Taco Salad Manufacturing, Inc., plans to announce that it will issue $2.13 million of perpetual debt and use the proceeds to repurchase common stock. The bonds will sell at par with a coupon rate of 5 percent. The company is currently all-equity and worth $6.60 million with 196,000 shares of common stock outstanding. After the sale of the bonds, the company will maintain the new capital structure indefinitely. The annual pretax earnings of $1.37 million are expected to remain constant in perpetuity. The tax rate is 21 percent.

What is the required return on the companys equity after the restructuring in percentage ?