5. Suppose Luther Industries is considering divesting one of its product lines.  The product line is expected to generate free cash flows of $2 million per year, growing at a rate of 3% per year.  Luther has an equity cost of capital of 10%, a debt cost of capital of 7%, a marginal tax rate of 35%, and a debt-equity ratio of 2.  This product line is of average risk and Luther plans to maintain a constant debt-equity ratio. Luther's Unlevered cost of capital is closest to: