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Consider the following information for Watson Power Co.: Debt: 5,000 7.5 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 102

Consider the following information for Watson Power Co.:

Debt: 5,000 7.5 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 102 percent of par; the bonds make semiannual payments.
Common stock: 105,000 shares outstanding, selling for $61 per share; the beta is 1.09.
Preferred stock: 14,500 shares of 7 percent preferred stock outstanding, currently selling for $104 per share.
Market: 8.5 percent market risk premium and 6 percent risk-free rate.

Assume the company's tax rate is 35 percent.

Find the WACC.

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