Train plc is an all equity financed established company experienced in the provision of training courses. Shares in Train have a beta value of 1.2. The directors of Train plan to expand their business by building hotels which are located near their training centres. Thirt plc is a listed hotel company with zero gearing. Its shares have a beta value of 1.5. The market premium for risk is 8% and the risk-free rate is 4%. Required What cost of equity should go into the NPV to appraise the new investment in hotels?