In: Finance
The Saunders Investment Bank has the following financing outstanding. Debt: 51,000 bonds with a coupon rate of 4.7 percent and a current price quote of 106.3; the bonds have 13 years to maturity and a par value of $1,000. 17,100 zero coupon bonds with a price quote of 27.3, 29 years until maturity, and a par value of $10,000. Both bonds have semiannual compounding. Preferred stock: 146,000 shares of 3.8 percent preferred stock with a current price of $93 and a par value of $100. Common stock: 2,120,000 shares of common stock; the current price is $83 and the beta of the stock is 1.15. Market: The corporate tax rate is 21 percent, the market risk premium is 6.7 percent, and the risk-free rate is 3.1 percent. What is the WACC for the company?