The Saunders Investment Bank has the following financing outstanding. What is the WACC for the company?

1. Debt: 50,000 bonds with $1000 par value, a coupon rate of 4.7 percent, and a current price quote of 103.5 (103.5% of par value); the bonds have 20 years to maturity. 200,000 zero coupon bonds with $1000 par value, with a price quote of 17.5 and 30 years until maturity.

2. Preferred Stock: 125,000 shares of 4 percent preferred stock with a current price of $89, and a par value of $100.

3. Common Stock: 2,300,000 shares of common stock; the current price is $55, and the beta of the stock is 1.40.

Market: The corporate tax rate is 40 percent, the market risk premium is 7 percent, and the risk-free rate is 4 percent.