Rice Co. has 110,000 shares of common stock outstanding at a market value of $25 per share and a beta of 1.2. The risk free rate and expected market return is 5% and 15% respectively. There are 20,000 shares of preferred stock outstanding at a market value of $37 per share that pays an annual dividend of $5. The bond issue has a total face value of $800,000 that sells at 105% of face value. The bond has a 13% annual coupon rate and matures in 1 year. The tax rate is 35%. What is Rice Co.s cost of debt?