AllCity, Inc., is financed

35%

with debt,

6%

with preferred stock, and

59%

with common stock. Its cost of debt is

6%,

its preferred stock pays an annual dividend of

$2.47

and is priced at

$34.

It has an equity beta of

1.1.

Assume the risk-free rate is

1.8%,

the market risk premium is

7.2%

and AllCity's tax rate is

35%.

What is its after-tax WACC?

Note: Assume that the firm will always be able to utilize its full interest tax shield.

Question content area bottom

Part 1

The WACC is

enter your response here%.

(Round to two decimal places.)