Cruiseliners, Inc. has 230,000 shares of common stock outstanding at a market price of $40 a share. Cruiseliners' just paid an annual dividend in the amount of $1.75 per share. The dividend growth rate is 3 percent. Cruiseliners' also has 8,000 bonds outstanding with a face value of $1,000 per bond. The bonds carry a 9 percent coupon, pay interest semi-annually, and mature in 5 years. The bonds are selling at 102 percent of face value. The company's tax rate is 35 percent. What is Cruiseliners' weighted average cost of capital?