(15 points) You are an outside analyst attempting to estimate the cost of capital for Red Hill Industrial. You do not know the corporation's target capital structure. However, the balance sheet shows a total of $65 million of long term debt with a coupon rate of 7%. The yield to maturity is 6.20% (before tax) and the total current market value is $72 million. The balance sheets also show the total of common stock and retained earnings is $65 million. The company's stock has a beta of 1.80 and the stock price is $19.00 per share. There are 11 million shares of stock outstanding, and the current risk free rate is 2%. The company recently paid a dividend of $1.00, and they typically pay out about 30% of their earnings in cash dividends. RHI's return on equity is 10% and the expected return on the market is 8.00%. What is your estimate of RHI's weighted average cost of capital if their marginal tax rate is 25%