LUVFINANCE, Inc. is estimating its WACC. It is operating at its optimal capital structure. Its outstanding bonds have a 12 percent coupon, paid semiannually, a current maturity of 17 years, and sell for $1,162. It has 100,000 bonds outstanding. The firm can issue new 20-year maturity semiannual bonds at the same cost of its current bonds but will incur flotation costs of $50 per bond

The firm could sell, at par, $100 preferred stock that pays a 12 percent annual dividend that is currently selling for $120. The firm currently has 1000000 shares of preferred stock outstanding.

Rollins' beta is 1.83, the risk-free rate is 2.56 percent, and the market risk premium is 6 percent. The common stock currently sells for $100 a share and there are 5000000 shares outstanding.

The firm's marginal tax rate is 40 percent. What is the WACC?