A publicly trаded cоmpаny cаlled Lincоre оwns two subsidiaries, one in the healthcare sector and another in the e-commerce sector. The healthcare business accounts for 40% of Lincore's revenues. Lincore's beta is 1.2 and its debt-to-value ratio is 30%. Lincore plans to spin-off its healthcare division into a separate, independent healthcare business called Nomosic. You need to estimate the cost of equity for Nomosic. Nomosic will not have any debt. Your research indicates that the average beta for publicly traded firms in the e-commerce sector is 1.4. The average D/E ratio for e-commerce firms is 0.35. The rate on Treasury bonds is 3%. Market risk premium is 5.5%. The tax rate is 35% for all firms. Nomosic's cost of equity after the spin-off is: