Droz's Hiking Gear, Inc. has found that its common equity capital shares have a beta equal to 1.7 while the risk-free return is 3 percent and the expected return on the market is 8 percent. It has 7 year semiannual maturity bonds outstanding with a price of $975 that have a coupon rate of 4 percent. The firm is financed with $140 million of common shares (market value) and $80 million of debt. What is the after tax weighted average cost of capital for Droz's, it is subject to a 35 percent marginal tax rate? Round your final percentage answer to three decimal places 8.3618% 9.95226 5389% 12.266%