XYZ Inc. has a current capital structure that is 38% equity, 33% debt, and 34% preferred stock. XYZ is considering a capital budgeting project. XYZ has estimated the following.
After-tax cost of debt: 3.0%
Cost of preferred stock: 6.0%
Cost of equity: 9.0%
What is XYZ's weighted average cost of capital (WACC) for this project.