Consider the following information for Watson Power Company: Debt: Common stock: 5,500 6.5 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 102 percent of par; the bonds make semiannual payments. 132,000 shares outstanding, selling for $62 per share; the beta is 1.06. Preferred stock: 18,000 shares of 5.5 percent preferred stock outstanding, currently selling for $105 per share. Market: 8.5 percent market risk premium and 5 percent risk-free rate. Assume the company's tax rate is 35 percent. Find the WACC.