Pratt, Inc. has 220,000 shares of common stock outstanding and is reviewing its capital structure. The market price is $45 a share. Next quarter, Pratt is expected to pay an annual dividend in the amount of $2.50 per share. The dividend growth rate is 1.8 percent. Pratt also has 8,500 bonds outstanding with a face value of $1,000 per bond. The bonds carry a 6.5 percent coupon, pay interest annually, and mature in 7.093 years. The bonds are selling at 106 percent of face value. The company's tax rate is 35 percent. What is Pratts weighted average cost of capital?