ABC Inc has 3 million common shares outstanding trading at 35 per share the company has one convertible bond with face value of $50 million a fifteen-year maturity and an annual coupon rate of 3% the bond pays coupons semi-annually the bond has a market value of $70million the current cost of equity for the firm is 8% the pre tax cost of debt is 4% and the marginal tax rate is 30% Assume that the market value of the firm's stock option part of the convertible bond is $32 million what is the weighted average cost of capital of the firm?