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Question 7 5 pts LUVFINANCE, Inc. is estimating its WACC. It is operating at its optimal capital structure. Its outstanding bonds have a 12 percent

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Question 7 5 pts LUVFINANCE, Inc. is estimating its WACC. It is operating at its optimal capital structure. Its outstanding bonds have a 12 percent coupon, paid semiannually, a current maturity of 17 years, and sell for $1.162. It has 100.000 bonds outstanding. The firm can issue new 20-year maturity semiannual bonds at par but will incur flotation costs of $50 per bond (Hint: the coupon rate on the new bonds the YTM on existing bonds). The firm could sell at par. $100 preferred stock that pays a 12 percent annual dividend that is currently selling for $120. The firm currently has 1,000,000 shares of preferred stock outstanding. Rollins beta is 1.29. the risk-free rate is 1.52 percent and the market risk premium is 6 percent. The common stock currently sells for $100 a share and there are 5.000.000 shares outstanding. The firm's marginal tax rate is 40 percent. What is the WACC

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