Given the following information for Evenflow Power Co., the WACC is __________. Debt: 2,500 8 percent coupon bonds outstanding, $1,000 par value, 18 years to maturity, selling for 103 percent of par; the bonds make semiannual payments. Common stock: 60,000 shares outstanding, selling for $64 per share; the beta is 1.13. Preferred stock: 7,500 shares of 5.5 percent preferred stock outstanding, currently selling for $105 per share. Market: 6.5 percent market risk premium and 5 percent risk-free rate. Marginal Tax Rate: 34%.

options: 10.78% 11.14% 9.26% 8.94% 8.15%

Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 11 years to maturity that is quoted at 102 percent of face value. The issue makes semiannual payments and has an embedded cost of 10 percent annually. The company's pretax cost of debt is _____.

options: 6.2% 8.2% 7.4% 7.9% 9.7%