Red Raider's Construction Company's common stock has a beta of 2.0 and is currently in equilibrium. The required return on Raider's common stock, is 15 percent, and the return on an average stock, is 10 percent. Mr. Raider (Red) serves as both the firm's owner and CFO, has predicted that inflation will rise by 2.0 percent (200 basis points) in the near term. He also realizes that his beta will increase by 10 percent due to more risky construction projects the firm is initiating. He believes the slope of the Security Market Line (SML) will remain constant, however. With the anticipated changes, what is the firm's expected cost of equity capital?