Consider the following information for Evenflow Power Co.,
Debt: 3,500 6.5 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.
Common stock: 84,000 shares outstanding, selling for $59 per share; the beta is 1.16.
Preferred stock: 10,000 shares of 5.5 percent preferred stock outstanding, currently selling for $106 per share.
Market: 8.5 percent market risk premium and 5 percent risk-free rate.
Assume the company's tax rate is 32 percent.
Required:
Find the WACC.