Unity Inc. recently hired you as a consultant to estimate the companys WACC. You have obtained the following information.

( 1) The firm's noncallable bonds mature in 12 years, have a 6.25 % semi-annual coupon, a par value of $1,000, and a market price of $928.00 . The firm has 2,000,000 bonds outstanding.

( 2) The companys tax rate is 30%.

(3) The firm has 7%, $100 par value preferred stocks. There are 5 million shares outstanding. The preferred stock currently sells at $102 per share.

(4) The risk-free rate is 2.25 %, the expected market return is 12.50%, and the common stocks beta is 0.90.

(5) The firm has 50 million shares outstanding of common stocks which sells at $40 per share. The firm just paid a dividend of $3.15 per share, and the constant growth rate is expected to be 5%.

(6) The bond-yield risk premium is 7%.

(7) The firm would like to use the highest of the three methods (i.e. CAPM, bond-yield plus risk premium, and DCF) to estimate the cost of equity, and it does not expect to issue any new common stock.

What is its WACC? Do not round your intermediate calculations.