Pacific Utilities Company has a present capital structure (which the company feels is optimal) of 45 percent long-term debt and 55 percent common equity. For the coming year, the company has determined that its optimal capital budget can be externally financed with: (i) $45 million of 7 percent first-mortgage bonds with the face value of $1,000 and maturity of 15 years, sold at $980; (ii) retained earnings. The companys common stock is presently selling at $25 a share, and next years common dividend, D1, is expected to be $1.00 a share. The company has 20 million common shares outstanding. Next years net income available to common stock is expected to be $80 million. A 6 percent annual growth in earnings and dividends is expected for the foreseeable future. The companys marginal tax rate is 21 percent. Write down the equation for the before-tax cost of debt with numerical inputs. Calculate the companys weighted average cost of capital for the coming year.