Consider the following information for Evenflow Power Co.,

Debt:		5,500 8.5 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.
Common stock:		132,000 shares outstanding, selling for $57 per share; the beta is 1.19.
Preferred stock:		20,000 shares of 8 percent preferred stock outstanding, currently selling for $105 per share.
Market:		10 percent market risk premium and 8 percent risk-free rate.

Assume the company's tax rate is 32 percent.

Required:

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

rev: 09_20_2012

Multiple Choice

• 13.88%

• 12.9%

• 13.04%

• 12.8%

• 13.3%