Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 14 years to maturity that quoted at 104 percent of face value. The issue makes semiannual payments and has an embedded cost lerate as an APR) of 12 percent annually.

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P14-15 Finding the WACC [LO3] Consider the following information for Evenflow Power Co., Debt: Common stock: Preferred stock: 2,500 7 percent APR coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 105 percent of par, the bonds make semiannual payments. 60,000 shares outstanding, selling for $64 per share; the beta is 1.09. 8,500 shares of 6 percent preferred stock outstanding (note: take this percentage and convert it into decimal format, then multiply times 100 to find the preferred dividend), currently selling for $107 per share. 9 percent market risk premium and 6 percent risk-free rate. Market: Assume the company's tax rate is 34 percent. Required: Find the WACC. (Do not round your intermediate calculations.) P14-15 Finding the WACC [LO3] Consider the following information for Evenflow Power Co., Debt: Common stock: Preferred stock: 2,500 7 percent APR coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 105 percent of par, the bonds make semiannual payments. 60,000 shares outstanding, selling for $64 per share; the beta is 1.09. 8,500 shares of 6 percent preferred stock outstanding (note: take this percentage and convert it into decimal format, then multiply times 100 to find the preferred dividend), currently selling for $107 per share. 9 percent market risk premium and 6 percent risk-free rate. Market: Assume the company's tax rate is 34 percent. Required: Find the WACC. (Do not round your intermediate calculations.) Multiple Choice 11.26% 10.36% 10.86% 10.46% 10.65%