Consider a firm with the following attributes:

50,500,000 shares of common stock outstanding that is currently trading at $26.00 per share.

A beta of 1.3.

5,000,000 shares of preferred stock outstanding paying an annual dividend of $0.90, which is currently trading at $11.25 per share.

A variable rate bank loan of $450 million, charging 10 bp (basispoints) over the six-month Libor (London Interbank Offer Rate). Assume the relevant Libor is currently 5%.

Note: basis points are 1/100 of one percent or .0001 (decimal).

500,000 Aaa bonds outstanding with a total face value of $500,000,000. The bonds offer a coupon rate of 12% (annual coupons) and are currently priced to yield 7.5%, or equivalently, sell at a 15% premium over par.

A marginal federal-plus-state tax rate of 35%.

Long-term U.S. government bonds yield 4%.

The historical market risk premium (rm - rrf), is 7%.

Assume the firm wishes to evaluate the purchase of a new assembly plant.

Given the above information, calculate the firms WACC.