You are working with a teammate to value Blue Dot Limited. You have developed the following FCF to Firm projection (including the terminal value at the end of Year 4): FCF to Firm Year $mm 1 40 2 45 3 50 4 520 Your teammate mistook the above cash flows as FCF to Equity and applied Blue Dots cost of equity as the discount rate, and arrived at an estimated equity value of $410 million, or $4.10 per share.

What is the cost of equity used by your teammate?