QUESTION 1 Dynegy Inc. (NYSE DYN) has 1,000 shares of common stock outstanding at a price per share of $1,310, with a market capitalization of $1.311 millions, and a rate of return of 14 2 percent. The firm has 9,600 shares of preferred stock outstanding at a price of $30 a share, resulting in a market capitalization of $288.000 The preferred stock carries a cost of seven percent. The outstanding 7%-coupon debt has a total face book value of $500,000 and currently sells for 84 percent of face suggesting that the firm's market value of debt is $420,000. The yield-to-maturity on the debt is 8 49 percent, and considering that the tax rate is 34 percent, the after-tax cost of debt is 5.6034 percent What is the firm's weighted average cost of capital? 11.39 percent 1199 percent 1159 percent 12.11 percent 1221 percent