You have gathered the following information for Frosty Ale, Inc., which has a 40 percent marginal tax rate.

• 2 million common shares outstanding
• 120,000 bonds outstanding
• Current yield to maturity is 7%
• Estimated market risk premium is 6%
• Current common stock price is $25 per share
• Current preferred stock price is $30 per share
• 90,000 preferred shares outstanding
• Estimated beta of stock is 1.2
• 10 year U.S. Treasury yield is 4.8%
• Annual preferred dividend is $3
• Bonds are trading at par
• Bonds have $1,000 face value

What is the firm's weighted average cost of capital (WACC)? Be sure to very clearly label/identify each input or item and what you are doing to have the opportunity to receivepartial credit.