Tootsie Drop has a beta of 0.9. The market risk premium is assumed to be 7.5%. The 3-month T-bill rate is 5%. Tootsie Drops last annual dividend was $1.50 per share while their last annual Earnings Per Share has been $2.50. Tootsie Drops average annual ROE has been 19% for the last 10 years. The current price of Tootsie Drop is $38. Eight years ago, Tootsie Drop issued a $1,000 face value 30 year 7% coupon bond paid semi-annually. The bond is currently selling for $960. Tootsie Drop issued preferred stock that pays an annual dividend of $3.75 and sells for $43 a share. TD has 500,000 shares of common stock outstanding, 40,000 bonds outstanding, and 50,000 shares of preferred stock outstanding. Assume that this capital structure is TDs target capital structure. TDs marginal tax rate is 38%.

What is Tootsie Drop's weighted average cost of capital (WACC)?