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Question 6 ( 1 5 marks ) NW Power Corp., who has a 3 5 % tax rate, presented you with the following information: Debt:

Question 6(15 marks)
NW Power Corp., who has a 35% tax rate, presented you with the following information:
Debt: 10,000 of 6.4% coupon bonds outstanding, $1,000 par value, 25 years to maturity, and selling for 108% of par; the bonds make semi-annual payments.
Common stock: 495,000 shares outstanding and selling for $63 per share; the beta is 1.15.
Preferred stock: 35,000 outstanding shares of $3.50 preferred stock currently selling for $72 per share.
Market: 7% market risk premium and 3.2% risk-free rate.
Calculate the weighted average cost of capital.
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