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Phillips Equipment has 80,000 bonds outstanding that are selling at par $1000 . Bonds with similar characteristics are yielding 8 percent. The company also has 750,000 shares of 7 percent preferred stock and 2.5 million shares of common stock outstanding. The preferred stock sells for $6 0 a share. The common stock has a beta of 1.34 and sells for $42 a share. The U.S. Treasury bill is yielding 3 percent and the return on the market is 1 2 percent. The corporate tax rate is 38 percent. What is the firm's weighted average cost of capital?