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Debt: 6,000 8 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 104 percent of par; the bonds make semiannual payments.
Debt: | 6,000 8 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 104 percent of par; the bonds make semiannual payments. |
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Common stock: | 126,000 shares outstanding, selling for $64 per share; the beta is 1.06. |
Preferred stock: | 19,500 shares of 7 percent preferred stock outstanding, currently selling for $107 per share. |
Market: | 8.5 percent market risk premium and 7 percent risk-free rate. |
Assume the company's tax rate is 32 percent. |
Find the WACC. |
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