New Homes has 10,000 bonds issue with a coupon rate of 4.5 percent that matures in 8.5 years. The bonds have a face value of $1,000 and a market price of $980. Interest is paid semiannually.

The companys 22,000 shares of preferred stock pay a $5 annual dividend, and sell for $100 per share.

New Homes 200,000 shares of common stock sell for $12 per share and have a beta of 1.5. The risk free rate is 4%, and the market return is 9%.

Assuming a 25% tax rate, what is the companys WACC?