AllCity, Inc., is financed

44%

with debt,

13%

with preferred stock, and

43%

with common stock. Its cost of debt is

5.8%,

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

1.9%,

the market risk premium is

7.2%

and AllCity's tax rate is

35%.

What is itsafter-tax WACC?

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

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Part 1

The WACC is

enter your response here%.