Anderson Companys capital structure consists of common shares, preferred shares, and bonds. It currently has 35,000 common shares in circulation trading at $10 per share. The common share has a beta of 1.21. There are 15,000 preferred shares trading at $4 per share. The shares pay an annual dividend of $0.30. There are 450, $1,000, 10-year bonds outstanding. The coupon rate is 9 percent, compounded semi-annually and the bonds trade at 97. The risk-free rate is 3 percent and the market risk premium is 5 percent. The marginal tax rate is 25 percent.

REQUIRED: 1. Calculate Anderson Companys WACC.