Problem 13-17 Preferred Stock and WACC

The Saunders Investment Bank has the following financing outstanding.

Debt:	130,000 bonds with a coupon rate of 9 percent and a current price quote of 112.0; the bonds have 20 years to maturity. 300,000 zero coupon bonds with a price quote of 17.0 and 30 years until maturity.
Preferred stock:	220,000 shares of 7 percent preferred stock with a current price of $69, and a par value of $100.
Common stock:	3,300,000 shares of common stock; the current price is $55, and the beta of the stock is 1.00.
Market:	The corporate tax rate is 35 percent, the market risk premium is 6 percent, and the risk-free rate is 3 percent.

What is the WACC for the company? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

WACC

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