M2M Company has 500,000 shares of common stock outstanding at a market price of $40 a share. Last month, M2M paid an annual dividend in the amount of $1.20 per share. The dividend growth rate is 6%. M2M also has 20,000 bonds outstanding with a face value of $1,000 per bond. The bonds carry a 6% coupon, pay interest annually, and mature in 10 years. The bonds are selling at 101% of face value. The company's tax rate is 25%. What is M2M's weighted average cost of capital? 7.36% 6.97% 6.78% 6.23% 5.94%