Pacific Intermountian Utilities Company has a present capital structure (which the company feels is optimal) of 50% long-term debt, 10% preferred stock, and 40% common equity. For the coming year, the company has determined that its optimal capital budget can be externally financed with 70million of 10% first mortgage bonds sold at par and $14million of preferred stock costing the company 11%. The remainder of the capital budget will be financed with retained earnings. The company’s common stock is presently selling at $25 a share, and next year’s common dividend is expected to be $2 a share. The company has 25 million common shares outstanding. Next year’s net income available to common stock (including net income from next year’s capital budget) is expected to be 106million. The company’s past annual growth rate in dividends and earnings has been 6%. However, a 5% annual growth rate in earnings and dividends is expected for the foreseeable future. The company’s marginal tax rate is 40%. Calculate the company’s weighted cost of capital for the coming year.