Consider the following information for Evenflow Power Co.,

Debt:		3,000 8 percent coupon bonds outstanding, $1,000 par value, 18 years to maturity, selling for 104 percent of par; the bonds make semiannual payments.
Common stock:		60,000 shares outstanding, selling for $59 per share; the beta is 1.18.
Preferred stock:		9,500 shares of 7 percent preferred stock outstanding, currently selling for $106 per share.
Market:		9 percent market risk premium and 6.5 percent risk-free rate.

Assume the company's tax rate is 33 percent.

Required:

Find the WACC. (Do not round your intermediate calculations.)

rev: 09_20_2012

Multiple Choice

• 10.84%

• 11.01%

• 10.74%

• 11.24%

• 11.86%