The management of Company GV believes that the firm’s current capital structure is optimal and plans to maintain it. This company has 50,000 bonds outstanding and the face value of each of these bonds is $1,000. The company has 10,000,000 shares of common stocks outstanding. The stock was issued at $40 each. The preferred stocks issued by this company were 2,500,000 shares and the issuing price was $20 per share.

Company GV has a beta of 1.2. The Treasury Bond yields 5.5 percent and return of the market portfolio is 11.5 percent. The company pays a dividend of $2 to its preferred stockholders. The coupon interest rate of the company bond is 9.5 percent. If the company is in the 30 percent tax bracket, what is the WACC of this company?