Current Market value of Mcdonalds 400,000 common shares is $2.65. Mcdonalds paid a dividend of $0.25 per share on its common shares this year and investment analysts have indicated that dividends are expected to grow at an average of 2.5% per year for the foreseeable future. Mcdonalds also has a $2 million face value long-term debt issue outstanding, which has 8 years left until maturity, carries an 11% coupon rate with interest paid semi-annually, and is priced at par to provide for a quoted rate yield to maturity of 10%. Finally, Mcdonalds has 50,000 preferred shares outstanding. These shares have a stated par value of $20, a dividend rate of $2 per share, and are currently priced to yield 9.75%. Floatation costs will be 6% before tax on new debt and 3% after tax on new preferred and common shares. Mcdonalds tax rate is 40%.

Calculate Mcdonalds weighted average cost of capital assuming that Mcdonalds intends to issue new common shares.