Problem:
Find the WACC for a company with a tax rate of 35%
Debt: 5,000 7% coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 92% of par, the bonds make semiannual payments.
Common Stock: 100,000 shares outstanding, selling for $57 per share, the beta is 1.15
Preferred Stock: 13,000 shares of 7% preferred stock outstanding, currently selling for $104 per share.
Market: 8% market risk premium and 6% risk-free rate.