Bruceton Hotels is an all-equity firm with 60,000 shares of stock

Bruceton Hotels is an all-equity firm with 60,000 shares of stock outstanding. The stock has a beta of 1.27 and a standard deviation of 13.8
percent. The market risk premium is 9.1 percent and the risk-free rate of return is 4.2 percent. The company is considering a project that it considers riskier
than its current operations so it wants to apply an adjustment of 1 percent to the project’s discount rate. What should the firm set as the required rate of
return for the project?

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