MB, a firm producing mobile phones, has an S&P rating of AAA and, accordingly, a credit spread of 1.5% on its debt. The firm finances its operations with both debt and equity. MB's book value of debt is $20 million, currently trading at 120% of par value (i.e., at a 20% premium). The firm has book equity of $20 million, and 2 million shares trading at $18 per share. The firm's beta is 1.25, the return on the market portfolio is E(Rmarket) = 9%, and the risk-free rate is 3%, while the corporate tax rate is 40%. The weighted average cost of capital of MB is _____________________.