Fiscal Cliff Inc. has a capital structure that consists of 10 percent common stock and 90 percent long-term debt. In order to calculate Fiscal Cliffs weighted average cost of capital, an analyst has accumulated the following information: The company currently has 20-year bonds outstanding with annual coupon payments of 9 percent. The bonds have a face value of $1,000 and sell for $775. The risk-free rate is 3 percent. The market risk premium is 7 percent. The beta on Fiscal Cliff's common stock is 2.1. The company's retained earnings are sufficient so that they do not have to issue any new common stock to fund capital projects. The company's tax rate is 40 percent. Given this information, what is Fiscal Cliff's WACC?