Source of Capital = $10,000,000. Preferred Stock = $2,000,000. Common Stock = $8,000,000.

To finance an investment, Vestor has issued 20 year bonds with a $1,000 par value, 6% coupon rate and at a market price of $950. Preferred stock paying a $2.50 annual dividend was sold for $25 per share. Common stock of Vestor is currently selling for $50 per share and has a Beta of 1.2. The firm's tax rate is 34%. The expected market return of the S&P 500 is 13% and the 10-Year Treasury note is currently yielding 3.5%. What discount rate (WACC) should Vestor use to evaluate the project?