Highered Ltd has a $150,000 bond issue outstanding that is selling at 90 percent of

face value. Highered Ltd also has 5,000 shares of preferred stock and 12,000 shares of common

stock outstanding. The preferred stock has a market price of $40 a share compared to a price

of $25 a share for the common stock. What is the weight of the preferred stock as it relates to

the firm's weighted average cost of capital?