A company has $100 million in capital. 45% of the capital was borrowed by issuing bonds. The bonds are currently trading at $1,050 each. The semiannual coupon rate on the bonds is 8% and they mature in 20 years. The face value of the bonds is $1,000 each. The current tax rate is 35%.

The company also raised capital by issuing common equity. The stocks are currently trading at $45 each. Next years dividends are expected to be $5 per share and are expected to have a constant growth rate of 3% per year. The common equity represents 50% of the companys capital.

The rest of the capital, 5%, was obtained by issuing preferred stock. The preferred dividends are $10 per share per year. The price of the preferred stock is $100 per share. Calculate the cost of capital, WACC, for the company.