l Ol quity using the CAPM (or SML) method Why do you think your estimates in (a) and (b) are so different? c. Question 1D - WACC Given the following information for Watson Power Co, find the WACC. Assume the company's tax rate is 35 percent. Debt: 10,000 bonds outstanding (# of bonds) with 6.4 percent coupon, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. Common stock: 495,000 shares outstanding, selling for $63 per share; the beta is 1.15. Preferred stock: 35,000 shares of preferred stock with annual dividend of $3.5, currently selling for $72 per share. Market: 7 percent market risk premium and 3.2 percent risk-free rate. osts and NPV