A firm has determined its optimal capital structure which is composed of the following sources and target market value proportions. Source of Capital Long-term debt Preferred stock Common stock equity Target Market Proportions 20% 10 70 Debt: The firm can sell a 14-year, $1,000 par value, 8 percent bond for S960. A flotation cost of 2 percent of the face value would be required. Additionally, the firm's marginal tax rate is 40 percent. Preferred Stock: The firm has determined it can issue preferred stock at $75 per share par value. The stock will pay a $10 annual dividend. The cost of issuing and selling the stock is $4 per share. Common Stock: A firm's common stock is currently selling for S20 per share. The dividend expected to be paid at the end of the coming year is $1.80. Its dividend payments have been growing at a constant rate for the last four years. It is expected that to sell, a new common stock issue must be under-priced $2 per share in floatation costs. Calculate the firm's weighted average cost of capital assuming the firm has exhausted all retained earnings. (use cost of issuing new common stock)