Long term capital structure of company KL is given below:

Sources of capital Book value ($ 000)

Debts 80,000

Preferred stock 20,000

Common stock 23,500

Retained earnings 50,000

The interest rate for debt is 10%, and the dividend for common stock is $2 per share and $2.5 per share for preferred stock, respectively. The preferred stock price is $20/share and common stocks are currently trading for $18/share. The net income of the Company is expected to be paid out 40% as dividends and 60% will be added to the retained earnings. The IRR of the company has been measured as 15%. Suppose that the average income tax ratio is 30 % and the corporate tax ratio is 25%, calculate and interpret the WACC of the Company.