Kracken Fisheries is expected to pay a $7.75 dividend at year end (D1 = $7.75), and the dividend is expected to grow at a constant rate of 5.5% a year, and the common stock currently sells for $100 a share. The before-tax cost of debt is 6.5%, and the tax rate is 35%. The target capital structure consists of 40% debt and 60% common equity. What is the company’s WACC if all equity is from retained earnings?