You are starting an athletic clothing chain. You have chosen Eastern Mountain Sports as your comparable. EMS has an equity beta of 1.80. EMS also has $80M in equity and $40M in debt, which is has a yield of 8%. The probability of default for the debt is 5% and the loss given default is 60%. The expected return of the market is 7% and the risk-free rate is 2%. What is the appropriate discount rate to use for your divisions assets/projects?