The company issues 50,000 bonds with 5% coupon rate payable annually. All the bonds mature in 15 years and are currently selling at $1,050 per bond. The company has 1,000,000 shares of common stock outstanding. The stock sells at $65 per share and has a beta of 1.1. The company also has 150,000 preferred stock outstanding, currently trading at $90 per share. The preferred stock pays an annual dividend of $6.50. The market risk premium is 7% and the risk free rate is 2.5%. The company has tax rate of 35%. What is the weighted average cost of capital (WACC) for the company?

Question 27 10 points Save Answer The company issues 50,000 bonds with 5% coupon rate payable annually. All the bonds mature in 15 years and are currently selling at $1,050 per bond. The company has 1,000,000 shares of common stock outstanding. The stock sells at $65 per share and has a beta of 1.1. The company also has 150,000 preferred stock outstanding, currently trading at $90 per share. The preferred stock pays an annual dividend of $6.50. The market risk premium is 7% and the risk free rate is 2.5%. The company has tax rate of 35%. What is the weighted average cost of capital (WACC) for the company? a. 9.66% b. 10.04% C. 6.98% d. 7.59%