Question 2 Given the following information for Hydro Power Co., find the WACC. Assume the company's tax rate is 31.5 percent. Debt: Common stock: Preferred stock: Debt 1: 13,000 7.8 percent coupon bonds outstanding, $1,000 par value, 17 years to maturity, selling for 105 percent of par; the bonds make semiannual payments. Debt 2: 11,500, 6.3% coupon bonds outstanding, 1,000 par value, 30 years to maturity, selling for 88 percent of par value; the bonds make annual payments. 83,000 shares outstanding, selling for $57 per share; Dividends just paid are 25 per share; the company expects to grow the dividends by 3% per year. Class A: 10,000 shares of 5.5 percent preferred stock outstanding (paying 5.5$ dividend), currently selling for 569 per share. Class B: 7,000 shares of 5% preferred stock outstanding (paying 55 dividend), currently selling for 47 $ per share. 6.5 percent market rate and 3.5 percent risk-free rate. Market