Titanium Inc. is considering setting up a manufacturing plant to produce a new line of aircraft engines. The company needs to estimate the appropriate cost of capital to use when evaluating this project. Titanium has 10 million shares outstanding, trading at $97 per share. It also has a bond issue outstanding with a face value of $55 million and an 8% coupon rate, which sells for 104% of par and matures in 6 years. The bond makes semiannual coupon payments. The 10 year treasury bond rate is 3% and the expected market risk premium is 8%. If Titaniums beta is 0.80, and its tax rate is 21%, What should be its cost of capital?