Mr. Williams is purchasing an entire bottling plant for $42,500,000. He has a tax rate of 35 percent.

He has a contract to bottle for SNAP-ON ICE TEA. The break- even numbers of the factory are good and Bonika Financial has calculated the IRR of the deal at 22%. The capital structure of Mr. Williams new bottling plant is as follows: $10,000,000 in equity at 6%, a preferred investors owns 100,000 shares of $25 each that pays a dividend of $5 annually. The rest of the capital structure is financed with debt which carries an annual interest expense of $3,000,000.

Calculate the WACC of the bottling plant.