ABC has the following market value capital structure, shown below, which is considered to be optimal. The firm has no preferred stock.

Debt $$400,000$

Equity $$600,000$

New bonds currently have a $10\%$ coupon rate and ABC's stock sells for $$40$ per share. ABC$$s EPS was $$6\mathrm{.}80$ in $2023$ and $$4\mathrm{.}40$ in $2018.$ The corporate tax rate is $40$ percent and the firm paid out $30\%$ of its earning out as dividends. What is the firm$$s cost of capital? $(12$ pts$)$