Sorensen Systems Inc.is expected to pay a $2.50 dividend at year end (D₁ = $2.50),the dividend is expected to grow at a constant rate of 5.50% a year,and the common stock currently sells for $37.50 a share.The before-tax cost of debt is 7.50%,and the tax rate is 40%.The target capital structure consists of 45% debt and 55% common equity.What is the company's WACC if all the equity used is from retained earnings? Do not round your intermediate calculations.

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