you are given the following info for watson power co. assume the companys tax rate is 40 percent.

Debt: 8000 6.3 percent coupon bonds outstanding, $1000 par value, 20 years to maturity selling for 106 percent of par: the bonds make semiannual payments.

Common stock: 350,000 shares outstanding, selling for $53 per share: the beta is 1.09

Preferred stock: 13,000 shares of 3 percent preferred stock outstanding, currently selling for $73 per share.

Market: 10 percent market risk premium and 4.3 percent risk free rate.