Stewart Inc. has $4,000,000 in total assets. The company's current capital structure consists of 25 percent debt and 75 percent common equity. Currently, the company's before-tax cost of debt is 8 percent. The risk-free rate (kRF) is 5 percent and the market risk premium (kM - kRF) is also 5 percent. At the firm's current capital structure, the company's beta is 1.15 (i.e., its current cost of common equity is 10.75 percent). Stewart's operating income (EBIT) is $300,000, its interest expense is $80,000, and its tax rate is 40 percent. The company has 80,000 outstanding shares of common stock. The company's net income is currently $132,000, and its earnings per share (EPS) is $1.65. The company pays out all of its earnings as dividends (EPS = DPS), and hence its growth rate is zero. Thus, its stock price is simply EPS/ks; where ks is the cost of common equity. It follows that the company's stock price is currently $15.3488 ($1.65/0.1075).
What is the company's WACC?