For questions 39 and 40: Bolero Corporation has one long term loan (interest bearing debt) of $700,000 at an interest rate of 8%. The company has accounts payable of $300,000 (non-interest bearing) and equity of $1,000,000. It estimates that its cost of equity is 16%. Its tax rate is 35%.

1. What is Bolero Corporations weighted average cost of capital on all liabilities and equity (or total invested capital)?