You are given the following information for company XYZ.

Long-term debt outstanding=$300,000

Yield to maturity (r_D) =6%

Number of shares of common stocks =10,000

Price per share =$50

Book value per share=$25

Beta of common stock=1.5

Expected rate of return on market portfolio=12%

Risk-free rate=6%

All projects for XYZ are identical.Calculate the cost of capital for company XYZ to use in their projects.Assume taxes are equal to zero.