Consider the following information for Evenflow Power Co.,

Debt:		2,500 7.5 percent coupon bonds outstanding, $1,000 par value, 19 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.
Common stock:		62,500 shares outstanding, selling for $57 per share; the beta is 1.13.
Preferred stock:		7,000 shares of 7 percent preferred stock outstanding, currently selling for $106 per share.
Market:		9 percent market risk premium and 6 percent risk-free rate.

Assume the company's tax rate is 32 percent.

Required:

Find the WACC.

ANSWER___________

Multiple Choice

• 10.92%

• 11.32%

• 11.78%

• 11.04%

• 10.82%