Phillips Equipment has 6,500 bonds outstanding that are selling at 97 percent of par ( $1000 each). Bonds with similar characteristics are yielding 7 percent, pretax. The company also has 48,000 shares of preferred stock and 75,000 shares of common stock outstanding. The preferred stock sells for $60 a share. The common stock has a beta of 1.25 and sells for $40 a share. The preferred stock pays $6 dividend per share. The U.S. Treasury bill is yielding 3 percent and the return on the market is 11 percent. The corporate tax rate is 30 percent. What is the weighted average cost of capital