Suppose that B2B, Incorporated has a capital structure of 37 percent equity, 18 percent preferred stock, and 45 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 14.5 percent, 11.0 percent, and 9.5 percent, respectively.

What is B2Bs WACC if the firm faces an average tax rate of 21 percent and can make full use of the interest tax shield?