ANDW plc pays corporation tax at 30% and has the following capital structure:

- Ordinary shares: 1,000,000 ordinary shares of nominal value 25p per share and market value of 79p per share. A dividend of 6p per share has just been paid and dividends are expected to grow by 5% per year for the foreseeable future.

- Preference shares: 250,000 preference shares of nominal value 50p per share and market value of 42p per share. The annual net dividend of 7.5% has just been paid.

- Bonds: 100,000 of 7% irredeemable bonds with a market price of 102 per 100 nominal. The annual interest payment has just been made.

Calculate the weighted average after-tax cost of capital of ANDW plc.

1. 7.0%
2. 9.0%
3. 11.0%
4. 13.0%