Consider the following information for Watson Power Co.:

Debt:		4,000 6 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.
Common stock:		92,000 shares outstanding, selling for $58 per share; the beta is 1.13.
Preferred stock:		12,000 shares of 5 percent preferred stock outstanding, currently selling for $106 per share.
Market:		8 percent market risk premium and 4.5 percent risk-free rate.

Assume the company's tax rate is 33 percent.

Find the WACC.

Multiple Choice

• 8.68%

• 8.87%

• 9.18%

• 8.78%

• 9.51%