A firms debt is 45% of its total capital. Beside that the firm has 50% common shares and 5 % preferred equity in its capital structure. The debt consists of bank loans with 10 % interest charged. We estimate the cost of the equity with the DDM; the dividend per share is 5 $ and the market price of the common shares is 35 $. (We do not expect growth in the dividends of the common shares.) The preference shares pay 6 $ dividend per share with a 40 $ price. What is the cost of the capital assuming that the tax-rate is 8%?