Consider a company with the following capital structure: The companys 20,000 bonds are selling at 160% of $10,000 face value per bond, while 20 million common shares are selling at $22 per share and 320,000 preferred shares are selling at $125 per share. The companys bonds are priced to yield 4%. Using the single-factor model, the companys equity beta is estimated to be 1.25. And the companys preferred shares are committed to pay $7.50 annual dividend per share indefinitely. The T-bills return 2% annually and the annual expected return of the S&P 500 Index is 8%. The company is in 20% marginal tax bracket. Calculate the annual weighted average cost of capital of this company.