FIN Ltd has decided to use the weighted average cost of capital (WACC) to discount the after-tax cash flows associated with project evaluation. You have been given the task of determining the after-tax WACC of the firm. You are informed that FIN Ltd uses the following securities to fund its operations:

7,000 individual bonds with a face value of $1000 that will mature in 10 years time offer a coupon that is paid half-yearly. The coupon rate for these bonds is 8% per annum. The current market interest rate for these bonds is 9% per annum.

500,000 ordinary shares, which recently paid a dividend of 20 cents. Dividends are expected to grow at 5% per annum. The beta of FIN Ltd is 1.2, the risk-free rate is currently 3% per annum, and the expected return on the market is 12% per annum.

400,000 preference shares, which pay an annual dividend of 1% on a stated value of $100. Each preference share is trading at a market price of $8.

The company tax rate is 30 percent.

a) Compute the WACC based on the above information.