The required return on the stock of Moe's Pizza is $11\mathrm{.}6$ percent and aftertax required return on the company's debt is $3\mathrm{.}64$ percent. The company's market value capital structure consists of $77$ percent equity. The company is considering a new project that is less risky than current operations and it feels the risk adjustment factor is minus $2\mathrm{.}7$ percent. The tax rate is $35$ percent. What is the required return for the new project?

Multiple Choice

$12\mathrm{.}18\%$

$7\mathrm{.}07\%$

$12\mathrm{.}47\%$

$6\mathrm{.}78\%$

$9\mathrm{.}77\%$