Phillips Equipment has $80,000$ bonds outstanding that are selling at par. Bonds with

similar characteristics are yielding $6\mathrm{.}75$ percent. The company also has $750,000$ shares of $7$

percent preferred stock and $2\mathrm{.}5$ million shares of common stock outstanding. The preferred

stock sells for $$53$ a share. The common stock has a beta of $1\mathrm{.}34$ and sells for $$42$ a share.

The U$.$S$.$ Treasury bill is yielding $2\mathrm{.}8$ percent and the return on the market is $11\mathrm{.}2$ percent.

The corporate tax rate is $38$ percent. What is the firm's weighted average cost of capital?