The Sargo Corp is planning to raise $10 million in capital to finance the expansion of their manufacturing plant. The break-up is as follows: 5 million in debt, 1 million in preferred stock and 4 million in common stock. They plan to issue 20 years bonds, paying 8% coupon annually, and expect to receive $952.68 per $1000 face value. Ignore floatation costs. They plan to issue perpetual preferred stocks and expect to receive $85.11 per face value of $100 with a promise to pay 10% annual preferred dividends. Ignore floatation costs. The risk-free rate is 7%, the expected return on the market is 20% and the beta of their stock is 0.90. What is the weighted average cost of capital (WACC)? Ignore floatation costs. Assume a tax rate of 35%