Question 1 The CK Investment Bank has the following capital structure. What is the WACC for the company? Debt: Preferred stock: Common stock: Market: Bond 1. 100,000 bonds with a coupon rate of 8% (paid semi-annually), a price quote of 120.0 and have 30 years to maturity. The semi-annual YTM is 3.24%. Bond 2. 100,000 zero coupon bonds (semi-annual compounding) with a price quote of 30.0 and 20 years until maturity. 200,000 shares of 5 percent preferred stock with a current price of $70, and a par value of $100. 5,000,000 shares of common stock, with a price of $60, and a beta of 1.2. The corporate tax rate is 40 percent, the market risk premium is 8%, and the risk-free rate is 3%.