Your private firm has $$3$M in debt outstanding, a market capitalization of $$19$M$,$ and its average tax rate of $12\%.$ New bonds would have to be issued offering investors a $2\mathrm{.}8\%$ YTM $($assume there$$s sufficient retained earnings to maintain the same capital structure$).$

Your closest competitor has a beta of $2\mathrm{.}2,$ D$/$E ratio of $0\mathrm{.}91,$ and $25\%$ tax rate.

Assume the risk$-$free rate is estimated to be $2\mathrm{.}1\%$ and the expected return on the market of $10\%$ over the coming years.

What cost of capital should be applied to your firm based on the competitor?

$($round to the nearest $0\mathrm{.}0001)$