As CFO of Mickeys Mullets, Inc., you are trying to determine the firms weighted average cost of capital (WACC). You have gathered the following information:

1. The firm has 2,000 bonds, 35,000 preferred shares, and 100,000 common shares of stock outstanding.

2. The bonds were 20 years bonds when they were issued 2 years ago, have a 9% coupon rate, paid annually, and a $1,000 face value. The bonds currently have a yield to maturity of 6.5881%.

3. The preferred stock pays a $5.25 annual dividend and currently has a dividend yield of 7.5%.

4. The firm just paid a $1.20 dividend on the common stock yesterday, which has a beta of 0.95, and expects to maintain a constant 7 percent growth rate in dividends.

5. You know the yield on short-term U.S. Treasuries is 5.3%, the historical market risk premium is 6 percent, and the firm has a marginal tax rate of 40 percent.