The Saunders Investment Bank has the following financing outstanding.

Debt: 20,000 bonds with a coupon rate of 12 percent and a current price quote of 110; the bonds have 20 years to maturity. 190,000 zero coupon bonds with a price quote of 20.5 and 30 years until maturity. Both bonds have a par value of $1,000. Assume semiannual compounding.

Preferred stock: 110,000 shares of 10 percent preferred stock with a current price of $85, and a par value of $100.

Common stock: 2,200,000 shares of common stock; the current price is $71, and the beta of the stock is 1.45.

Market: The corporate tax rate is 30 percent, the market risk premium is 5 percent, and the risk-free rate is 2 percent.

What is the WACC for the company?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

I have already calculated the following:

Total value of debt $6,095,000.00

Total value of preferred $9,350,000.00

Total value of common $156,200,000.00

Total capital value $171,645,000.00

Cost of preferred stock 11.76%

Cost of equity 9.25%

Weight of Debt 3.55%

After tax cost of debt 10.50%

Weight of equity 91.00%

Weight of preferred stock 5.45%

WACC 9.43% (Weighted average cost of capital = Weight of debt * After tax cost of debt + Weight of Equity * Cost of equity+ Weight of Preferred stock* Cost of Preferred stock)

I am using the WACC formula but the homework checker is still saying the WACC is incorrect. I think the issue is with how I set up excel to calculate the information for the bonds:

Issued Coupon Price Maturity Total value Rate

Bonds 20,000.00 0.12 110 20 $2,200,000.00 17.08%

Zero Coupon 190,000.00 20.5 30 $3,895,000.00 13.83%

When I try to make the annual coupon $120 I get an error in the excel formula for the rate.

I need help understanding what I am missing in the WACC formula and if I have miscalculated one of the values I have already found.