Consider the following information for Evenflow Power Co.,
Debt: 3,000 8 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 102 percent of par; the bonds make semiannual payments.
Common stock: 72,000 shares outstanding, selling for $62 per share; the beta is 1.17.
Preferred stock: 8,500 shares of 7 percent preferred stock outstanding, currently selling for $104 per share.
Market: 9.5 percent market risk premium and 7 percent risk-free rate.
Assume the company's tax rate is 33 percent.
Required:
Find the WACC. (Do not round your intermediate calculations.)
a) 13.17%
b) 12.13%
c) 12.23%
d) 12.63%
e) 12.32%