Consider the following information for Evenflow Power Co.,

Debt: 3,000 8.5 percent coupon bonds outstanding, $1,000 par value, 19 years to maturity, selling for 105 percent of par; the bonds make semiannual payments.

Common stock: 66,000 shares outstanding, selling for $61 per share; the beta is 1.17.

Preferred stock: 11,000 shares of 7.5 percent preferred stock outstanding, currently selling for $107 per share.

Market: 9.5 percent market risk premium and 7.5 percent risk-free rate. Assume the company's tax rate is 32 percent.