what is the cost of debt for the UVE corporation? (do not round until final answer)

A. less than 4.5%

B. 4.5%-5.5%

C. 5.5%-6.5%

D. 6.5%-7.5%

E. greater than 7.5%

The UVW Corporation has three bond issuances outstanding. Bond 1 is an annual bond with a $1,000 par value, $80 coupon payments, maturing in 8 years, and trades today at $1,107.60 with 120,000 bonds outstanding. Bond 2 is a semi-annual bond with a $10,000 par value, $295.00 coupon payments, maturing in 8 years, and trades today at $8,776.51 with 18,000 bonds outstanding. Bond 3 is a quarterly bond with a $1,000 par value $15.50 coupon payments, maturing in 8 years and trades at $1,038.48 with 80,000 bonds outstanding. UVW has 1,400,000 shares of preferred stock outstanding paying a dividend of $6.30 with a share price of $51.50. UVW has 51 million shares of common stock outstanding with a reported beta of 1.30 that is trading at $18.25 and pays a dividend of $0.80 annually and expected sustained dividend growth of 3.70% for the foreseeable future. The expected return on the market is 9.50% and the risk-free rate is 3.50%. When measuring the expected return on equity, you decide to weight the return generated by CAPM at 70% and the Continuous Dividend Growth (Gordon Growth) model at 30%. The UVW Corporation is taxed at the 21% level