As a newly hired financial analyst, your first job at XYZ Inc. is to calculate the company's cost of capital. The present capital structure, which is considered optimal, is as follows: Market Value Debt $160 million Preferred Stock $20 million Common Equity $220 million Total Capital | $400 million If XYZ Inc. issues new debt, then the bond market expects a yield of 7.5%. Preferred stock is trading for $96, has a $100 par value and pays an annual dividend of 8% (the next dividend is due in one year). Common equity has a beta of 1.20, the market risk premium is 5%, and the risk-free rate is 3%. If the firm's tax rate is 40%, what is the weighted average cost of capital? Round answers to the nearest tenth of a percentage