Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 10 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $1,000. The firm could sell, at par, $100 preferred stock which pays a 10 percent annual dividend, but flotation costs of 5 percent would be incurred. Rollins' beta is 1.2, the risk-free rate is 8 percent, and the market risk premium is 4 percent. Rollins is a constant-growth firm which just paid a dividend of $2.00, sells for $31.18 per share, and has a growth rate of 6 percent. The firm's policy is to use a risk premium of 2.8 percentage points when using the bond-yield-plus-risk-premium method to find ks. The firm's marginal tax rate is 40 percent.