Sorensen Systems Inc. is expected to pay a $2.00 dividend at year end (D₁ = $2.00), the dividend is expected to grow at a constant rate of 5.0% a year, and the common stock currently sells for $50.00 a share. The before-tax cost of debt is 6%, and the tax rate is 41%. The target capital structure consists of 40% debt and 60% common equity. What is the companys WACC if all the equity used is from retained earnings?