AB Ltd has in issue 1 million ordinary shares, par value 35p and 200, 000 of 9 per cent redeemable bonds. The current ex-dividend market price of the ordinary shares is 52p per share and the current ex-interest market price of the bonds is 85 per 100 par. The company has just paid a dividend of 8p per share and dividends are expected to continue at this level indefinitely. If the company pays corporate tax at a rate of 40 per cent, what is its weighted average cost of capital?