Consider the following information for Watson Power Company: Debt: 3,500 7 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 102 percent of par; the bonds make semiannual payments. Common stock: 73,500 shares outstanding, selling for $56 per share; the beta is 1.08. Preferred stock: 11,500 shares of 6 percent preferred stock outstanding, currently selling for $104 per share. Market: 8.5 percent market risk premium and 5.5 percent risk-free rate. Assume the company's tax rate is 34 percent. Find the WACC.

Multiple Choice

9.29%

10.32%

9.39%

9.79%

9.46%