Consider the following information for Watson Power Company:

Debt: $2,5005\mathrm{.}5$ percent coupon bonds outstanding, $$1,000$ par value, $19$ years to maturity, selling for $103$ percent of par; the bonds make semiannual payments.

Common stock: $,52,500$ shares outstanding, selling for $$60$ per share; the beta is $1\mathrm{.}18.$

Preferred stock: $,7,500$ shares of $5$ percent preferred stock outstanding, currently selling for $$104$ per share.

Market: $6\mathrm{.}5$ percent market risk premium and $4$ percent risk$-$free rate.

Assume the company's tax rate is $34$ percent.

Find the WACC.

Multiple Choice

$8\mathrm{.}31\%$

$7\mathrm{.}5\%$

$7\mathrm{.}69\%$

$8\%$