Problem: JJ Industries currently has a capital structure that consists of 75 percent common equity and 25 percent debt. The risk-free rate is 5 percent. The market risk premium is 6 percent. JJ's common stock has a beta of 1.2. JJ has 20 year bonds outstanding with an annual coupon rate of 12 percent and a face value of $1,000. The bonds sell today for $1,200. The company's tax rate is 40 percent. What is the company's current weighted average cost of capital (WACC) ?