Consider the following information for Watson Power Co.:

Debt:		4,500 6 percent coupon bonds outstanding, $1,000 par value, 19 years to maturity, selling for 104 percent of par; the bonds make semiannual payments.
Common stock:		103,500 shares outstanding, selling for $58 per share; the beta is 1.14.
Preferred stock:		14,000 shares of 5.5 percent preferred stock outstanding, currently selling for $106 per share.
Market:		7 percent market risk premium and 5 percent risk-free rate.

Assume the company's tax rate is 32 percent.

Find the WACC.

Multiple Choice

• 8.64%

• 9.21%

• 8.52%

• 8.42%

• 8.92%