Hatch Corporations target capital structure is 40 percent debt, 55 percent common stock, and 5 percent preferred stock. Information regarding the companys cost of capital can be summarized as follows:

The company may borrow money from the bank at 8%.

The cost of the companys preferred stock is 10%.

The companys common stock sells for $20 a share, and is expected to pay a dividend of $2 a share at the end of the year (i.e., D1 = $2.00). The dividend is expected to grow at a constant rate of 6 percent a year.

The firm will be able to use retained earnings to fund the equity portion of its capital budget.

The companys tax rate is 40 percent.

What is the companys weighted average cost of capital (WACC)?