You are currently considering an investment in a project in the energy sector. The investment has the same riskiness as Exxon Mobil stock (ticker: XOM). Using the data in Table 1 shown here,

Table 1: Estimated Factor Betas, 2005-2015
Factor	MSFT	XOM	GE
MKT	0.32	0.75	1.29
SMB	-0.45	-0.61	-0.39
HML	-0.12	0.16	0.82
PR1YR	-0.06	0.33	-0.22

and Table 2 shown here,

Table 2: FFC Portfolio Average Monthly Returns, 1927-2015
Factor Portfolio	Average Monthly Return (%)	95% Confidence Band (%)
MKT - rf	0.66	(+0.33, -0.33)
SMB	0.19	(+0.19, -0.19)
HML	0.43	(+0.21, -0.21)
PR1YR	0.72	(+0.29, -0.29)

,

calculate the cost of capital using the FFC factor specification if the current risk-free rate is 2.6%

per year.