5. The following pertains to Bunk Corporations present capital structure:

Bonds 9,800,000

Preferred Stock 1,400,000

Common Stock 9,800,000

The current selling price of the preffered stocks is 10 per share

The current selling price of the common stocks is 40 per share

Prevailing market rate for bonds is 9%

Burnik Corporation is expected to pay a dividend of 0.60 per share on preffered stocks. It is also expected preferred stocks. It is also expected to pay dividends of 1.20 per share on its common stock.

The dividend earned on the common stock is expected to grow 8% per year

It is currently experiences an income tax of 32%.

Its cost of common equity using common stock is? ____