Torres Investment Securities (TIS) has the following financing outstanding. Assume TIS corporate tax rate is 40%. What is the WACC for this firm?

a. Debt: TIS has bonds with a $52 million face value outstanding. They trade at 106.5, and have a 5.7% coupon rate, which is paid semi-annually. When they were issued 12 years ago, they had 32 years to maturity.

b. Common stock: There are 2.3 million shares of common stock outstanding. The stock has a beta of 1.20. The stock just paid a dividend of $3.000926. Assume the required return is 13%, and that the dividend growth rate is 8%.

c. Preferred stock: The firm currently has 125,000 shares of 4.0% preferred stock outstanding. These shares currently trade on the market at 79.0, though they have a par value of $100.

d. Market Information: The current risk-free rate is 4%, and the market risk premium is 7%.