Consider the following information for Watson Power Company: Debt: Common stock: 4,500 5 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 104 percent of par; the bonds make semiannual payments. 112,500 shares outstanding, selling for $56 per share; the beta is 1.07. 16,000 shares of 4 percent preferred stock outstanding, currently selling for $106 per share. 7 percent market risk premium and 4 percent risk-free rate. Preferred stock: Market: Assume the company's tax rate is 35 percent. Find the WACC. 7.74% . 7.34% 7.95% O 7.24%