The Saunders Investment Bank has the following financing outstanding.

Debt:
53,000 bonds with a coupon rate of 4.9 percent and a current price quote of 106.7; the bonds have 15 years to maturity and a par value of $1,000. 17,500 zero coupon bonds with a price quote of 28.3, 25 years until maturity, and a par value of $10,000. Both bonds have semiannual compounding.

Preferred stock:
148,000 shares of 3.6 percent preferred stock with a current price of $91 and a par value of $100.

Common stock:
2,160,000 shares of common stock; the current price is $85 and the beta of the stock is 1.05.

Market:
The corporate tax rate is 23 percent, the market risk premium is 6.9 percent, and the risk-free rate is 3.3 percent.

What is the WACC for the company?

Question

The Saunders Investment Bank has the following financing outstanding.

Debt:	53,000 bonds with a coupon rate of 4.9 percent and a current price quote of 106.7; the bonds have 15 years to maturity and a par value of $1,000. 17,500 zero coupon bonds with a price quote of 28.3, 25 years until maturity, and a par value of $10,000. Both bonds have semiannual compounding.

Preferred stock:	148,000 shares of 3.6 percent preferred stock with a current price of $91 and a par value of $100.

Common stock:	2,160,000 shares of common stock; the current price is $85 and the beta of the stock is 1.05.

Market:	The corporate tax rate is 23 percent, the market risk premium is 6.9 percent, and the risk-free rate is 3.3 percent.

What is the WACC for the company?

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