ABC is a digital camera manufacturer. It has just paid a dividend of $0.77 per share. The number of outstanding shares is 700,000 and the market price of the stock is $9.2. The company is expected to increase dividend by 6.46% per year indefinitely. The company also has 8,000 zero coupon bonds outstanding (par value = $1,000) with 7 years to maturity currently selling at $469.2. The risk-free rate is 2.4% and the market risk premium is 6.9%. The beta of ABCs common stock is 1.2. The corporate tax rate is 35%. What is the weighted average cost of capital (WACC) of ABC using a conservative estimate of cost of equity?