Sally Gross, an investment analyst, has collected the following information regarding Lehman & Tiffany Co.:

--The yield to maturity (YTM) on the company's bonds is 10 percent.

--The company's current dividend is $0.80 a share.

--The company's stock price is $22.

--The company expects that its dividend will grow at a constant rate of 8 percent a year.

--The company's capital structure is 65 percent equity and 35 percent debt. The company's tax rate is 40%.

--The company anticipates that total flotation costs will equal 11 percent of the amount issued.

Assume the company accounts for flotation costs. Calculate the company's WACC.