ZYPPAH, 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 20 years, have a 10.50 % semi-annual coupon, a par value of $1,000, and a market price of $1,042.00 . The firm has 2,000,000 bonds outstanding.

( 2) The companys tax rate is 30%.

(3) The firm has 6%, $100 par value preferred stocks. There are 5 million shares outstanding. The preferred stock currently sells at $90 per share.

(4) The risk-free rate is 2.35 %, the market risk premium is 9.00%, and the common stocks beta is 1.30 .

(5) The firm has 25 million shares outstanding of common stocks which sells at $50 per share. The firm just paid a dividend of $3.25 per share, and the constant growth rate is expected to be 6%.

(6) The firm would like to use the average of the two methods (i.e. CAPM 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.