Mike is a sportswear company. Its free cash flow at the end of last year was 2.5B EUR. It is expected that its cash flow will grow at 5% per year indefinitely. Mike has non-operational assets worth 10B EUR and its currently debt free. There are 3 competitors of Mike: Abidas, Leopard and OB with corresponding unlevered betas of 1.2, 1.4 and 1.6. The risk free rate is 2% and the market risk premium 6%. The corporate tax rate is 20%. For each of the questions below choose the closest answer.

i) If Mike´s unlevered beta is the average of the industry, what is Mike´s cost of capital?