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The Saunders Investment Bank has the following financing outstanding. Debt: 10,000 bonds with a coupon rate of 11 percent and a current price quote of

The Saunders Investment Bank has the following financing outstanding.

Debt:

10,000 bonds with a coupon rate of 11 percent and a current price quote of 109.5; the bonds have 20 years to maturity. 180,000 zero coupon bonds with a price quote of 20 and 30 years until maturity. Assume semiannual compounding.

Preferred stock:

100,000 shares of 9 percent preferred stock with a current price of $84, and a par value of $100.

Common stock:

2,100,000 shares of common stock; the current price is $70, and the beta of the stock is 1.4.

Market:

The corporate tax rate is 35 percent, the market risk premium is 6 percent, and the risk-free rate is 3 percent.

What is the WACC for the company?

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