Sorento Systems Inc. is expected to pay a P2.50 dividend at year end (D1 = P2.50), the dividend is expected to grow at a constant rate of 5.50% a year, and the common stock currently sells for P52.50 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?