Jupiter Equipment, Co. (JE) has 20 million common shares outstanding that currently trade at $11 per...

Jupiter Equipment, Co. (JE) has 20 million common shares outstanding that currently trade at $11 per share. The company also has $55 million of bank debt that costs 5% per year. The estimated standard deviation of JE’s stock return is 0.5, the estimated standard deviation of S&P 500 index is 0.3, and the correlation between the JE’s stock and the S&P 500 is 0.45. If the market risk premium is 6%, the risk-free rate is 2% and the firm's tax rate is 35%, compute the weighted average cost of capital.

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