Debt:		4,500 8 percent coupon bonds outstanding, $1,000 par value, 19 years to maturity, selling for 102 percent of par; the bonds make semiannual payments.
Common stock:		99,000 shares outstanding, selling for $65 per share; the beta is 1.1.
Preferred stock:		13,500 shares of 7 percent preferred stock outstanding, currently selling for $104 per share.
Market:		8.5 percent market risk premium and 6.5 percent risk-free rate.

• 10.8%

• 10.98%

• 11.85%

• 11.3%

• 10.9%