Pacific Desert Corp is considering a large investment in bio-fuel algae. For this new project the company has determined that its optimal capital budget can be externally financed with $70 million of 10 percent first-mortgage bonds sold at par and $14 million of preferred stock costing the company 11 percent. The remainder of the capital budget will be financed with common stock, which is presently selling at $25 a share, and next year's common dividend, Di, is expected to be $2 a share. The company will issue 2.24 million common shares. The company's past annual growth rate in dividends and earnings has been 6 percent. However, a 5 percent annual growth in earnings and dividends is expected for the foreseeable future. The company's marginal tax rate is 40 percent. Calculate the company's weighted average cost of capital