Pfd Company has debt with a yield to maturity of

5.8%,

a cost of equity of

13.7%,

and a cost of preferred stock of

8.8%.

The market values of its debt, preferred stock, and equity are

$10.8

million,

$2.5

million, and

$15.9

million, respectively, and its tax rate is

35%.

What is this firm's after-tax WACC?

Note: Assume that the firm will always be able to utilize its full interest tax shield.