Droz’s Hiking Gear, Inc. has found that its common equity capital shares have a beta equal to 2.5 while the risk-free return is 8 percent and the expected return on the market is 14 percent. It has 7-year semiannual maturity bonds outstanding with a price of $1,050 that have a coupon rate of 7 percent. The firm is financed with $120 million of common shares (market value) and $80 million of debt. What is the after-tax weighted average cost of capital for Droz’s, if it is subject to a 35 percent marginal tax rate? Round your final percentage answer to three decimal places.