You are given the following information for Watson Power Co. Assume the companys tax rate is 25 percent.

Debt:	20,000 6.9 percent coupon bonds outstanding, $1,000 par value, 23 years to maturity, selling for 109 percent of par; the bonds make semiannual payments.
Common stock:	530,000 shares outstanding, selling for $71 per share; the beta is 1.19.
Preferred stock:	23,500 shares of 4.7 percent preferred stock outstanding, currently selling for $92 per share. The par value is $100 per share.
Market: What is the company's WACC?	7 percent market risk premium and 5.4 percent risk-free rate.