Wavering Plc is trying to decide on what discount rate to use when appraising future capital investment options. It is currently financed by a mixture of debt and equity, detailed as follows:

	Book value 000s
1 million 1 ordinary shares	1,000
Retained earnings	1,500
12,500 100 6.4% irredeemable debentures	1,250
Mortgage at 10% interest rate (secured on premises)	250

The market price of ordinary shares is 3.30, and the debentures have a market price of 80. The company pays corporation tax at a rate of 33%.

The current return on government securities is 5%, the average stock market rate of return is 9% and the company has a beta value of 1.6.

Requirement: Calculate the companys weighted average cost of capital.