Your firm shows the below bata:



Debt

Outstanding debt $500M face value

Current quote 110

Coupon Rate 7.5%

Annual Coupons

TTM 20 years

Tax rate 36%



Common Stocks

Outstanding shares 20M

Price per share $25

Beta 1.15

Market risk premium 8%

Risk free rate 3%



Preferred Stocks

Outstanding shares 5M

Price $25

Annual Dividend $2.5



What is the weighted average cost of capital? (show your work)