Question: Wherewolf is considering a project that is more risky than the firm's current operations. Therefore, the required return for this project will be 2.5% lower

Wherewolf is considering a project that is more risky than the firm's current operations. Therefore, the required return for this project will be 2.5% lower than Wherewolfs cost of capital. Wherewolf has a cost of equity of 12% and a cost of debt of 8.1%. The debt-equity ratio is .72 and the tax rate is 26%. What is the cost of capital for this project?

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