The following information is available concerning a firm's capital:

Debt: Bonds with a face value of $1000 and an initial 20-year term were issued five years ago with a coupon rate of 8% paying semiannually. Today these bonds are selling for $846.30.

Preferred stock: Preferred stock that pays an annual dividend of $9.50 is trading at $79.16.

Common equity: The stock is selling for $22.50 per share. An annual dividend of $1.70 was just paid and is expected to grow indefinitely at 6%.

Target capital structure: The firm's target capital structure is of 30% debt, 20% preferred stock, and 50% equity.

The firm can issue any type of security without paying flotation costs. The combined federal and state tax rate is 40%. Calculate the firm's WACC based on its target capital structure.